Write About Property All Content Feed

Turkey -- The Next Eastern Europe?

2013-02-19T14:08:46+00:00

You might think that is a strange title. Heck, if you don't I certainly felt strange writing it, but as the solicitor said to the judge, I am coming to a point your honour.

Is it not true that Eastern Europe was one of the hottest property investment destinations in the overseas property investment boom of the early-mid noughties? And isn't it also true that... sorry I'll stop now.

During the recent overseas property boom Eastern Europe exploded, not as a whole like a bomb but in two stages dermined by accession into the EU. In 2004 Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, andSlovenia all acceeded to the EU and onto the radars of property investors. This was perfect timing because buying property overseas was becoming more popular due to the emergence of the internet, and because of these 2 factors many of the countries above enjoyed prollific property booms fuelled almost entirely by foreign buyers, especially Brits. In 2004 the Estonian housing market was booming, not the first housing market boom in the world, but for the first time casual armchair investors had the means to find this out -- the internet -- no longer did they have to buy a Spanish villa and hope that it was a good investment, they could now put the horse before the cart, and did so in their droves.

Brits had been buying overseas property for decades, but it was retirement and lifestyle choices as they bought far-from-cheap villas and luxury properties on the Mediteranean coast. But as these new countries came into the EU Brits were exposed to property at incredibly low prices and with a strong potential for growth as they were emerging markets in for the massive boost provided by EU accession. Brits and others from around the world made big bucks on such investments, especially in Czech Republic, Estonia, Poland, and to a lesser extent, Lithuania, enjoying capital appreciation of up to and over 30% per year. The same happened when Bulgaria and Romania joined in 2007, in the former more than the latter because of its popular ski resorts.

Turkey isn't looking like acceeding to the EU anytime soon and if its property prices were growing at anywhere near 30% per annum in the current climate people would be running for the hills and I certainly wouldn't be writing about it in an article like this. But we live in a very different world; the EU isn't so attractive looking at present and people would much rather have reliable and steady if unexciting growth than the earth-shattering figures they looked for during the boom. And for that reason, along with a whole host of related ones Turkey is looking like being the next Eastern Europe.

The next Estonia. Estonia wasn't a dull market that was lucky to get into the EU, which caused a housing boom. Like the others Estonia got into the EU because it was a strong and vibrant emerging market full of potential, and its housing market was booming. In fact, according to the Global Property Guide the Estonian housing market was in a constant boom between 2000 and 2007.

Before the financial crisis the Turkish economy had been growing by around 6% per annum since the AK Party took power in 2002, and its property market was doing ok with lifestyle buyers, but since the crash it has burst onto the scene as one of the hottest property markets in the world -- in this respect the crisis has done Turkey a favour.

When Turkey endured its latest in a long line of recessions at the start of the last decade, the people said enough is enough when they elected the AK Party. As well as putting a stop to the military's corrutption as a hindrance to the-then boom-bust economy they did things like increasing foreign exchange reserves and putting an office of the central bank in all major bank branches. Thanks to these steps the Turkish economy endured only a short recession and the banking system not only stayed intact but emerged as one of the best in the smouldering-ash-world that remained.

Since the recession ended in Q4 2009 it has grown in double digits year on year in several quarters, seen the second fastest growth in the world once, become the fastest growing economy in the EU in 2011, and generally one of the most vibrant and promising emerging markets in the world. This puts it on a par with any of the Eastern European markets as they headed into their property booms. However, they could boast potential 30% capital growth.

Since emerging strongly from the financial crisis Turkish property prices have been growing at an average of 10% per year for the last 2 years according to the REIDIN/GYODER/Garanti Bank index. Another reason why the banking system not only survived but endured and prospered is because of its small mortgage market and therefore small exposure to the sub-prime whoopsie. Since the crash the Turkish mortgage market has been growing at 20-25 per cent per year according to central bank data.

Today's property investor doesn't want scintillating growth, but combine the metrics above with Turkish employment and population growth, which are scintillating and you have a recipe investors can really sink their teeth into.

Even holiday home investors aren't losing out. During the Eastern Europe boom private casual foreign investors were almost all holiday home investors; buying holiday homes with the potential to make an income from renting them out to like-minded holidaymakers. Turkish tourism went from 9.75 million in 1998 to 26.3 million in 2008 and continued to grow even during the financial crisis, taking visitor numbers to 31.4 million in 2011. So there is plenty of growing demand in holiday hotspots for holiday home investors to find great opportunities as well.

One thing that Turkey has over and above its Eastern European predecessors is remarkable economic stability again thanks to the AK Party. The party has paid down public debt from 74% of GDP in 2002 to just over 30% and IMF debt from $23.5 billion to just $5.5 billion as of 2011 according to Erdogan. Thanks to this and the party's proven record of fiscal responsibility the Turkish economy is also one of the most stable in the world.

Estonia and the Czech Republic were two incredibly popular markets from 2000-2005, and then you had Bulgaria and Ukraine from 2002-2008. In years to come Turkey will be called one of the hottest markets in the world between 2009 and 2018. What is it that they say about early bird and worm... It's not too late for Turkey if you catch my drift.

Written by Liam Bailey on behalf of Turkey property developer Wise Move Homes, developer of the nearing-completion Altinkum apartment development Apollon Holiday Village.

Top 5 Overseas Property Investment Hotspots for 2013

2013-01-21T11:14:13+00:00

First of all, to all my regular readers, my apologies as I am late with this report. I publish a prediction of the top 5 property investment hotspots for every year, but traditionally I publish just before the end of the preceding year. However this year I was in hospital around the time I usually write and post it, and since I came out I have been fighting the tides trying to catch up with all the work I have on.

But, I digress. Onto the world of property worldwide. It is now going on 7 years since America started to crumble, 6 years since the UK caught the disease, and between that and 5 years since most the rest of the world followed suit, and still we aren't back out the other side in any real way.

Thank fully there is some good news; for a start on the whole things are getting slightly better. The latest release of the Global Property Guide global real estate index highlighted that prices fell in 23 countries and rose in 21 in Q3 2012. This is a big improvement on Q2 when prices fell in 25 countries and rose in only 13. In Q3 23 countries performed better than a year ago, while 20 markets performed worse. As always there continues to be bright spots where investors can capitalise on the volatility to make even greater returns, and the US is now recovering strongly -- many economists have pondered whether the US would lead the world out of crisis as quickly as it led it in. I guess now we will see. For now I will concentrate on picking some bright spots for the year ahead.

1: Turkey

Turkey continues to be one of the best property investment opportunities in the word. Since a yearlong recession ended with 6.4% GDP growth in Q4 2009 the economy and property market have continually gone from strength to strength. For at least 18 months now the GYODER monthly house price index has consistently shown prices growing by 10-11 year on year. The economy has grown consistently as well. After the growth of 8.9% in 2010 and 8.8% in 2011 it is expected to have slowed last year to around 4%. However, exports continued to post record figures as did foreign direct investment, and this led to shrinkage in the worrisome current account deficit, the first such reductions in a long time.

Most importantly you have a young and increasingly skilled workforce, which are part of a big population growing as fast in affluence as it is in number. In the major cities, where employment growth is strongest, natural population growth is boosted by migration and demand for property to buy and rent continues to soar. Some say there is risk of a bubble, and the argument that price growth isn't strong enough to be a bubble won't suffice. But price growth is regulated by the fact that the central bank has an office in every major bank branch, and banks lend against their own valuation, this regulates prices and reduces risk of a bubble.

The final piece of the puzzle is low property prices. Despite the recent growth, Turkish property prices continue to be among the lowest in the world. All this shouts residential buy to let investment please, thank you. But you also have massive tourism growth in the hot coastal resort towns, -- I could go on all day, but if I have whetted your appetite you can follow the trail for yourself.

2: Indonesia

The Indonesian economy grew by 4.5% in 2009, before accelerating to 6.1% in 2010, and again to 6.4% in 2011 according to the CIA World Factbook, and while figures aren't definite, estimates are around 6.3% for 2012. On top of that property prices have grown strongly since 2002 and have shown continued growth during the crisis according to Global Property Guide data. Little wonder then that Indonesia is known as one of the hottest emerging economies in the world, deserving of its place in the CIVETS and MINT groupings of leading emerging markets.

But most importantly Indonesia has a young growing population, growing as rapidly in affluence as it is in number, a vibrant energetic workforce, increasing political stability and low property prices. This makes it well worth a dollop of attention from investors looking to buy this year.

3 Lithuania

Turkey and Indonesia are emerging markets with something in common that makes them good bets for investment, the combination of low property prices, population growth and the growth of affluence bringing greater demand for property. As an emerging market Lithuania has these attributes too, but it is another commonality that drew my attention to Lithuania, namely the combination of sustained house price falls and strong economic growth.

In 2009 and 2010 the Latvian property market was the butt of the Global Property joke, with prices falling at a rate of around 50% per year. At the same time the economy was also spiralling downwards. Then as 2010 progressed into 2011 the economy did a complete u-turn, and by Q3 2011 Latvia was on top of the Global Property Guide index with prices up 13% year on year.

Lithuania has a pretty similar story. The economy and property market were hit hard by the crash into the end of 2009. The Lithuanian economy turned round in Q2 2010 after massive falls, but in the last couple of quarters the growth has started picking up. During the economic recovery the property market continued to fall (it has been falling continuously for four years according to the Global Property Guide) but recently the contraction has begun to slow.

House prices are falling at a much slower pace according to the Global Property Guide, what's more housing construction and permits are significantly up this year, and housing loan volumes are beginning to recover. Unemployment is falling, and a new anti-austerity socialist government was been elected. With such positive signals and the economy growing so strongly, the property market could turn at any point and investors should be drilling down into the market to find the best opportunities.

4: America

The worm has turned. The American property market is now in full recovery mode, with all the metrics turning positive in the second half of 2012 and some strong growth in sales and prices over the last few months across most of the country. Florida and Miami continue to present as two of the hottest in the recovery, and there are still repossessed bargains for foreigners to snap up.

5: Philippines

The Philippines economy has grown strongly throughout the financial crisis, while the property market did take a bit of a beating. However, the property market has recovered strongly in the last year and is now one of the hottest markets in the world. The economic resilience of the Philippines, combined with the rapid economic growth, business and employment growth and growing population make it one of my hot choices for the year ahead.

Student Property Investment: Overhyped Fad or Next Big Thing?

2012-12-18T15:04:13+00:00

Student property investment is a hot topic right now, and by that measure you could say it has already been the next big thing. But is it a hot investment by the measure of actual investment success, namely return on investment?

Until recently I would not have even asked this question, but a Love Money article stopped me in my tracks.

Since the credit crunch several alternatives have popped up in property investment circles in replacement of the incredibly popular fly to let model. Things like timber investment, bamboo, carbon credits investment and more recently mineral investments. Student property, while not alternative in that sense, has become popular from the same seed, namely investors' desire for a safe, secure investment with guaranteed or practically guaranteed and/or easily assesible returns.

I wrote a few articles on the first two for a company I won't name, and at the time I read many articles and brochures all making a case for these being two very good investments indeed.

But then, the other day I read an article on Love Money's website, which outright said that carbon credit investment schemes were a scam. But it wasn't just their opinion, the author called attention to a Financial Services Authority enquiry into the scheme, which wanted to hear from anyone who had invested in one such scheme and lost their investment, or from anyone who had actually made a return.

Therein I discovered a problem with these new alternative investments. When you try to research new investments, the only material out there comes from people with a vested interest in promoting them as good investments. So, when I researched carbon credits, in the absense of any conflicting information I started to believe all the positive assertions contained in the literature to be true, and the more I believed the more I started to back up their propaganda with what I thought was my common sense. In short: the opinions they put forward as fact became fact in my own mind as well.

Of course, that doesn't mean that all those listed above are scams, although the Love Money article did mention minerals investments as the next scam investment on the market.

But student property has one difference to the rest of them, apart from the fact that it is an investment in actual touchable property that will always tend to appreciate in value over the long term. It is not new and there are external sources to back up the information. In fact, the main strength of student property investment doesn't come from property agents or investment advisors; it comes from the University and College Admissions Service (UCAS), namely, the continued growth in student numbers and the subsequent widening of the deficit between accommodation demand and accommodation supply.

The number of UK students enrolling in its universities and colleges did take a slight knock this year, because of the increased tuitiion fees, but this was more than made up for by the continued growth in the number of students from overseas.

The latest figures from UCASE showed that despite a 7.4% drop in applications from within the UK, demand for accommodation will still outstrip supply by 32%, helpd by a 13.7% growth in overseas applications.

Thanks to this huge deficit between supply and demand, new student accommodation developments are able to secure agreements with one or more higher education establishment, allowing investors the security of knowing their rental pool has been found for them, and that they have a ready supply of people who not only want, but need to rent their property. Thus, all investors have to do is choose the best location, the best property for the best price, conduct due-dilligence on the propperty as well as on the agreement with school, and all other neccesary due-dilligence and they have a rental income as close to guaranteed as it needs to be.

So, in conclusion, student property investment may seem like a shiny new fad, but the fundamentals of student mobility and improving education systems abroad make for a secure long term rental investment.

Article written by Liam Bailey on behalf of student investment property specialists Pure Student Property.

Is Altinkum a Good Fly to Let Investment Choice

2012-11-23T11:17:51+00:00

I have written many guides on what to look for when choosing an overseas property investment destination and property. It makes sense to start looking at various destinations with respect to how well they stack up against the list of guidelines -- starting with Altinkum.

How Does Altinkum Measure Up to My Advice

1: Proximity to Airports

The nearest airport to Altinkum is Bodrum International (BJV), which is about 60 minutes away. Properties within 20 minutes of the airport typically enjoy 39% better occupancy rates. So, obviously Altinkum does not stack up too well on this point. However, it does have mitigation in the form of the largest marina on the Aegean Sea.

2: Proximity to/abundance of amenities such as: supermarket, bank, doctor, dentist, shops, bars, restaurants and pharmacy?

Today, tourists are increasingly moving away from the all-inclusive deal and seeking out their own self-catering accommodation. This is particularly true of a place like Altinkum, which attracts primarily low-budget travellers. But this type of traveller needs to know that he will be able to easily pick up everything he needs in order to cater for himself and his family. This means that tourists looking at private rented accommodation want to know it is near supermarkets and banks, as well as bars and restaraunts for when they want to go out of an evening. Things like doctors, dentists and pharmacies are also a plus.

Altinkum stacks up well on this point, because it is not a coastal resort, but a coastal city with a permanent population of at least 10,000 people. This means that there are plenty of shops, including supermarkets as well as dentists, doctors shops, bars, restaraunts and even pharnacies.

3: Length of Season, possibilities of low season self-use

Any investor worth their salt buying into a holiday lettings property knows that high season should be kept for paying customers, a because it is the time of year when the most money can be made, but it is also the time of year when you are most likely to win repeat business. So, the owners will want to use their property in low season preferably, but many have found out to their dismay that this is not always possible. For example a lot of people who bought into some of the new resort developments in Cyprus found that the place was completely closed off in low season, you couldn't even get a pint of milk.

Thank fully for obvious reasons this will not happen in Altinkum, again because it is a populated city. Altinkum's year round tourism trade is also growing, possibly because of the number of holiday home owners coming in low-season, but this can only be good for the overall area and for investors in Altinkum.

4: Are there dining options nearby?

Another essential for most holidaymakers (and in this case rental tenants) is a wide variety of culinary options within a short and ideally walking distance.

Again, Altinkum scores highly on this one as well, as it has many dining options in and around the town, including restaraunts offering primarily British cuisine, alongside those offering primarily Turkish dishes, as well as things like Italian and more. In fact according to Trip Adviser there are 34 restaraunts in Altinkum, with 464 reviews between them -- most of which are very positive indeed (ordering by rating from negative to positive only 6 reviews seem to be negative.

Written by Liam Bailey on behalf of Turkey property developer Wise Move Homes, specialists in Altinkum properties.

Buy to Let Investment Picks November

2012-11-10T13:41:40+00:00

As the world crashed investors had to adapt quickly to the changing reality in order to keep property investment profitable. They did this extremely well, swapping the pursuit of returns for that of safety; revitalising safe-haven markets like France and Germany, and branching out into new niches like student property and timber plantations. In recent times thank to resurgent rental markets, buy to let investment has become a top investment choice in the current climate. Here are some of my top choices:

2nd Tier Cities in the UK

Not everyone can afford to buy into the rental-boom-having ultimate safe-havens like London, but thankfully this doesn't mean they can't make good returns investing in buy to let property in the UK. Indeed, according to the latest data for September rental yields are much stronger north of the capital, particularly the North West 7.3% region and the Yorkshire and Humber region 6.6% (compared to London at 5.1%). The index by LSL Property Services (parent company of the Reeds Rains lettings agent network and Your Move website) has shown rents rising strongly across the UK for the last 3 years, including a 3.2% year on year growth to the new record £741pm average in September.

One city within the top rated North West region reported to be largely responsible for the top yields is Manchester, a city which has received a lot of investment and regeneration, and which is coming out of recession faster than much of the UK. Indeed, it is put on a par with London in terms of rental potential, and this is evidenced by the LSL index. One area where it beats London is on the low prices of property, currently there are swanky high spec new build apartments available in great city locations priced at the likes of £85k. This is a great opportunity for investors.

Buy to Let or Fly to Let in Turkey

Turkey is currently and undoubtedly one of the hottest markets in the world, and hottest in a good way. For those that don't know ratings agency Fitch has just upgraded Turkey to investment grade, the country's first investment grade backing, but some including Bloomberg report that Moodys could follow suit within 6 months. If Moody's does bump Turkey up it should bring in an extra 2 billion USD in investment every year. Turkey has been attracting soaring foreign investment over the last few years anyway, so the upgrade can only be a big boost to the economy.

An economy that is already one of the strongest in Europe and the world. Even now as GDP growth is expected to slow to around 4%, exports are still growing strongly closing the trade deficit and along with other strong sectors helping employment and affluence to continue growing. This is leading to soaring demand for quality housing in cities like Istanbul, where property prices are also exceptionally low making for a top-notch buy to let opportunity for investors.

Then you have growing tourism and places like Altinkum, which offers the lowest prices holiday homes in Turkey. According to Warren Coleman, director of Turkey property developer Wise Move Homes, the firm currently receives as many enquiries on its website from tourists looking to rent as it does buyers looking to buy at its Altinkum property the Apollon Holiday Village.

"They know we are developers selling property, but the resort has really made a name for itself and with most owners simply renting to friends and family there is little chance to find rentals on any of the portals. This makes it a good opportunity for fly to let investors to jump in and snap up the few remaining properties."

Global Property Recovery Barometer 2013 US and UK

2012-10-23T13:24:29+00:00

The world has suffered one of the worst financial crises it has ever known in the last 6 years. Six years. That is a long time to be suffering, but of course we haven't all been suffering constantly; and especially not investors.

Those investors that came out of the crisis with a Pound, Dollar or Kruna left to spare were pretty quick to adapt to the new world. Some thought the best approach was to batten down the hatches and ride it out, but others realised that there were pockets of positivity out there, often either borne out of negativity and/or certainly surrounded by it (negativity that is). The UK buy to let boom is a perfect example of positivity borne out of the opposite.

But now things seem to be on the turn on a much wider scale, I thought it would be a good time to take a look at some of the major players in the world and what they look set to do in the coming year.

America: Warm - Hot

The US is a major part of the global economy so it being broken wasn't helping anyone. Its economy has been recovering since late 2010 but its housing market has continued to drag it down, until now... In the last few months the US housing market seems to have made a miraculous recovery; rising sales, falling inventories and even rising prices. Indeed, sales have gotten so fast in the best-performing regions like California have a new problem in weak supply now hampering sales.

Ratings agency Fitch is predicting year-end sales growth of 19.5% for new homes and 8.5% for existing home sales, as well as 19% growth in single family home starts. It predicts further but slower growth next year, tipping new home sales to grow 13%, existing sales to grow 4.5% and single-family starts to grow 14%. Both the grannie Mae's Fannie and Freddie are also predicting strong growth.

Fannie sees new home sales increasing 20.2 percent this year and another 17.9 percent next year, and existing homes rising to 7.8 percent by the end of this year and 3.9 percent next year. Freddie's economists see total home sales up 8.9 percent this year and 8.1 percent next year, with starts up 22.9 percent in 2012 and another 21.3 percent next year.

Investors have already called bottom on America so now is the time to get in and invest, indeed in some ways it is already too late.

UK: Freezing

The UK's property market is a lot like the weather, cold, bleak and miserable. Outside of London, where the market turned in early 2010 and hasn't looked back, the rest of the UK saw only a brief respite from early-end 2010 and has suffered stagnation and further falls since.

Sure, the rental market is booming with rental rates continuing to increase, but because the economy is still in the doldrums higher rents is simply leading to increased arrears.

The banks still aren't lending, especially to first time buyers, most of whom can't save a sufficient deposity, or wouldn't have a good enough credit rating even if they could. While government schemes like NewBuy are helping a little, the banks aren't committed and recent studies have shown the number of mortgage products for first time buyers has fallen rapidly in recent months.

The government is committed to austerity, so there is nothing to suggest that anything will change massively in the picture over the coming 12 months. In the UK it is a case of buying at massive discounts in strong rental markets in order to make a good rental yield and wait out the recovery.

Falling Trade Deficit Bright News for Turkey

2012-09-29T12:43:21+00:00

Turkey's trade deficit is continuing to fall on the back of export growth, which has been strong for the last 2 years, and now falling imports as well, which is a fairly new phenomena for Turkey. According to Turkstat the trade deficit fell to $5.86 billion in August, a drop of almost a third on last year's $8.43 billion. The drop was fuelled by a 14.5% year-on-year increase in exports and 4.8%. drop in imports.Economists had projected a $7.9 billion deficit, little changed from July.

"The lower-than-expected August trade deficit was mainly due to the slowdown in domestic economic activity, and net gold exports," Emre Tekmen and Tugba Talinli, economists with Turk Ekonomi Bankasi, wrote in a note. "We might see net gold exports contribute to the trade balance in the coming months," they wrote.

Turkey has managed to keep exports growing strongly despite the turmoil within its biggest trading partner the EU, because as exports to the EU have fallen, other markets have stepped in to make up for it -- particularly emerging markets in the Middle East and Africa. For example exports to the United Arab Emirates increased almost ninefold in August from a year earlier to $2.22 billion, of which $1.9 billion was gold.

This is thanks to the government's 2 yearlong push to increase Turkey's trade and relations with as many countries around the world as possible, particularly the Arab states, including many visa-free deals with Syria, Jordan, Lebanon, and Libya, Portugal, Russia and many more.

Exports will boost growth in the third and fourth quarter, said Economy Minister Zafer Caglayan. After runaway growth of over 8% in both 2010 and 2011 growth is predicted to slow this year. The government has said it wants growth to slow to around 4% so it can shore up the progress made so far, but growth slowed to 2.9% in Q2 from 3.3% in Q1. Caglayan will be hoping export growth is sufficient to turn this figure back up again.

An additional benefit of the closing trade gap, is the fact that it will also close the current account deficit, which, at 7.9% of GDP is seen as the blight of the Turkish economy, which is otherwise a picture of health and vitality against a baron backdrop of an EU in crisis.

After ballooning to 10% of GDP (78.3 billion USD) last October, Nilufer Sezgin, chief economist with Istanbul-based brokerage Ekspres Invest believes it could drop by as much as 0.4% to $58.9 billion, or 7.5% of GDP, from $61.4 billion in July.

Article written by Liam Bailey on behalf of Wise Move Homes, specialists in Turkey property including property in Altinkum.

Spanish Bail-Out, Will They or Won't They?

2012-09-03T13:56:05+00:00

With the ECB now looking set to re-start buying bonds of indebted countries, -- although so far only short term bonds are in the clear -- the next question on the table is whether or not the €100 billion already requested by Madrid will be enough or whether a full national bail-out is on the cards.

"If I believe it is good for Europe as a whole, for the Euro, and for Spain, I will do it, and if not, not."

Puts me in mind of British footballer and subsequent manager Kenny Dalglish who would often answer commentators with: "maybe aye, maybe no", but those are actually the words of Spanish Prime Minister Mariano Rajoy, as to whether or not he will ask the Eurozone to provide Spain with more finanancial assistance than the 100 billion already requested.

I find it very strange indeed that whether or not Spain will need further assistance depends not on whether or not Spain needs further assistance, but whether or not that assistance would come with additional conditions tagged on by the IMF.

Not strange that the Spanish PM wants to avoid any further conditions, god knows Spain is struggling hard enough to meet the conditions already imposed, but strange that the need for financial assistance can be switched on or off depending on what conditions it comes with, if it doesn't desperately need the money then why is asking for it even being considered?

Anyway, digression over no one can say for sure whether Spain will need a full-bailout or what the bond-buying program will look like after the ECB announces it later this month. Spanish Economy Minister Luis de Guindos said today that he didn't think Spain would even need the full $100 billion it has already requested.

"In principle, it looks like not all of (the €100 billion) will be used," De Guindos told Onda Cero radio.

Spain has now created a bad-bank, which will buy up toxic assets from the banks at knock down prices. This should help the banking sector immensly, but the discount the bank will receive on the assets is yet to be thrashed out. However, the creation of the bad bank is a step the markets have hoped to see for some time, one just hopes it isn't too late. Spain is due to issue more debt just before the ECB announcement, which will require investors to make a very big gamble on the announcement's contents. It will be interesting to see how big they are willing to bet.

One thing that begins to look more and more apparent, is that the Eurozone is going to survive. One wishes that they would stop going to the wire so much; maybe make a few decisions to stop problems when they are still minor, rather than letting everything become life-or-death before acting, but as crisis after crisis is staved off by more money appearing from thin air, it becomes clear that between Germany and the IMF they are going to keep doing what is neccesary to keep the Eurozone alive. Possibly because its break-up could be the cause of a third-world-war or maybe just to avoid being left with egg on their faces for creating a single-currency union without any kind of banking union, or common policy-making behind it.

Written by Liam Bailey, on behalf of Polaris World, the developer behind heavily discounted bank owned properties including the Condado De Alhama development in Murcia, where buyers can get discounts of up to 60% and mortgages up to 100%.

First-Time Buyers & Second-Steppers Share Broken Market Misery

2012-08-26T13:01:13+00:00

The plight of UK first time buyers is a pretty miserable tale. It's bad enough that many simply can't afford to buy in their area of choice or necessity. Worse that if they can afford house prices per se, they can't get a mortgage without a hefty deposit, that at present most can't save because of rising living costs and soaring rents. Worse still, is that even if they manage to raise a sufficient deposit they probably won't get a mortgage anyway, unless they have an immaculate credit rating. Yes, first time buyers have it rough from all sides.

But there is another side waiting to unwittingly add to their misery, and it is the one side you would never expect it from. Most first time buyers buy their home from first time owners looking to move up the ladder on to their next home, the so-called "second stepper". Although new builds are becoming more and more popular in today's market, because of government schemes and private sector schemes etc, in a healthy housing market the first time buyer needs the second-stepper as much as the reverse is true.

But at the moment they are both hurting each other; piling on the misery and adding to each other's plight through no fault of their own. Many first time buyers can't buy, which is reducing the number of buyers for the second-steppers to sell to, but on the flip-side many second-steppers can't sell anyway because they don't have sufficient equity in their home to get the deposit they need for the next step on the ladder.

According to a new report by Lloyds TSB second-steppers are worse off than first time buyers; with the average house costing 4.7 times their average gross annual salary, compared to 4.1 times for first time buyers. Worse, the study found that second-steppers have an average of just £9,008, which would equate to just 5.4 per cent of the value of a typical semi-detached second stepper property -- way less than the deposit a second-stepper would normally have for their mortgage, like at the peak in 2005 when second-steppers could raise an average 44% deposit from the sale of their home.

This is a self-perpetuating cycle of misery for both groups; first time buyers can't buy and second-steppers can't sell because the market isn't healthy, and the market isn't getting any healthier because first-time buyers can't buy and second-steppers can't sell. At the heart of both their problems are the banks, which continue to pile on the problems.

This week, Santander, the UK's second-biggest lender, announced it would be increasing mortgage rates for hundreds of thousands of existing borrowers from October 3. Suren Thiru, a housing economist at Lloyds TSB, said: "The current problems facing second steppers have serious implications for the wider housing market, creating a bottleneck that significantly limits the number of homes available to first-time buyers, as well as stopping many home-owners who need to move from doing so."

The chain is broken from the bottom up and this is a massive problem for the housing market, one that it can't resolve without a big improvement in lending conditions. First time buyers need to be able to borrow affordably with a smaller deposit. Second-steppers need to either be able to borrow affordably with a smaller deposit, or for prices to rise and increase their equity. However, if prices rise it will increase the amount first time buyers will need for their deposit thereby cancelling out the benefit. Thus we are left with both buyer groups needing to be able to borrow affordably with smaller deposits.

Student Property Investment Soars as Investors Shy From Risk

2012-08-15T11:23:24+00:00

What a wonderfully messed up world we all live in, a world wrecked by a financial crisis that we are still struggling to come out the other side of even 6 years later.

To begin with the saying "adopted a wait and see approach" became very popular, but was basically a synonym for the fact that we had all been completely freaked out by the realisation of just how quickly the world could be brought to its globalised knees. But investors soon realised that if they were to wait and see how long it took for the global economy to recover, they would be waiting whilst seeing the best opportunities pass them by.

This realisation brought investors back out of hiding, but they were a very different breed from before the crash. Before the crash investors were chasing the biggest returns with very little regard for the levels of risk. After the crash that turned on its head and it is still the same now, investors have very little appetite for risk and are willing to accept a lower return in exchange for a lower level of risk.

Welcome to the era of the safe-haven, the safe-haven location or the safe-haven asset class. Assets and/or locations that have proven resilient to the downturn. One safe asset class that investors are snapping up hand over fist is student investment property. This is a very low risk investment because the occupants are already there ready to rent, and very high levels of occupancy come packaged with the investment.

Student property investment has grown at an incredible rate over the last 3 years and no just because of the ready-tenants and low-risk, but because of the fact that demand for university places and student accommodation continues to soar and to outstrip supply. This is especially true because the number of accommodation spaces hasn't grown anywhere near as fast as the number of students applying for and receiving places in UK universities. The most acute imbalance between supply of student accommodation and demand is in top university cities such as Liverpool, Oxford, London, Birmingham and Leeds.

Investors purchased some £800 million worth of student investment property in the UK in the first half of this year according to the latest report from CBRE. This was more than double the £375 million invested in the first half of last year. According to the report 99% occupancy and incredibly short supply in the private rented sector of student housing will lead to continually rising rents. This is on top of an average 22% growth in rents between 2007 and 2010 according to NUS/Unipol data. The CBRE report said:

"With reported occupancy rates of 99 per cent or more and a lack of supply in the private rented sector, rents for purpose built accommodation are expected to grow annually in most university cities at least in line with inflation."

The latest data from UCAS shows that while domestic applications have fallen slightly on the raised tuition fees this year, that growth in the number of overseas applications is more than making up for it

According to the latest figures from UCAS the number of applicants for places has been hit slightly by the rise in fees this year, but the growth in the numbers of overseas students is more than making up for it. Even with the drop in domestic applications demand for accommodation is still massively above supply, especially on custom built student housing units.

The private sector has stepped up to fill this void, new developments are being built and old ones refurbished. Some investment opportunities see the development come under the management of one or more universities, with many having been built with this agreement in place. These opportunities are investors' favourites because there is practically zero risk, the university is entering the agreement because it needs the accommodation for existing students, so high occupancy is guaranteed. In some (rare) cases the developments will not be linked to a university. These developments will often be within close distance of several universities, and will often come with rental management.

In an investment environment where reliability of return is more important than size of return, student investment is a winning package because the existing pool of tenants means the management company or developer can practically guarantee a certain (high) level of occupancy, allowing the investor to calculate yields and make informed choices -- exactly what investors today are looking for.

Spanish Property Back on the Menu With Tasty Loans, Rates and Prices

2012-08-10T09:56:59+00:00

This is a credit crunch, right? Yet banks in Spain are more willing to lend, and willing to lend more than they were before it, which presents an incredible opportunity for ready buyers.

Spanish banks are in a lot of trouble, and the millstone around their neck is the number of repossessed properties that they have on their books. In order that they can sell these properties as quickly as they can the banks are offering loans of up to 100% at very good rates.

It has the propensity to look foolish; that the banks are trying to lend their way out of a crisis caused by foolish lending practices, but that is not the case. According to agents like Prestige Brokers the banks may be lending more and at better rates, but they are being much more careful about who they lend to.

The mortgages are certainly proving a hit with the buyers, who seem to be putting Spanish property back on the menu. UK based overseas mortgage provider Conti has just reported a 33% increase in demand for Spanish mortgages in May and June.

"Bargain prices and the opportunity to negotiate these down even further with some very motivated sellers mean that it's most certainly a buyer's market," said Clare Nessling, director at Conti.

The weak Euro is also a factor, although the pound isn't as strong against the Euro as it was during the boom, at 1EUR/1.27GBP it is certainly better than the days when parity was on the cards, especially with the current prices.

The loans are available on the bank-owned properties, which are being sold at about 50% less than their peak prices. When we display a good currency deal in the property world, we usually do so using a property worth 100,000 of the given currency, in this case you can currently buy a 100,000 Euro property for just £78,740. However, bank-owned properties are currently available for a lot less.

In fact, at Murcia property Condado de Alhama resort, which is the closest resort to the site of the new Paramount theme park, properties are currently available with finance at prices from just 57,500 Euros, which is currently £45,312. With such low prices, favourable exchange rates and favourable mortgage deals you can see why more investors are giving Spain another chance.

Buying a Property in Turkey: the Pros and Cons

2012-06-05T15:16:55+00:00

There are literally thousands of articles out there Turkey's potential as a property investment destination, its strong banking system, strong stable economy, stable political system, rapidly growing economy, rapidly growing population, massive tourism growth and on an on with facts, figures and dates to support it all. But there are also downsides which are far less well covered in property investment related stories. However, if we are to present Turkey property to savvy investors in the hope that they will invest, then we must present the pros and cons and allow them to decide for themselves. Let's start with the negatives shall we?

Buying a Property in Turkey -- The Negatives:

Culturally Different is Tantamount to Backward in Some Respects

Sitting astride three continents: Asia, the Middle East and Europe, Turkey has a cultural diversity that few places in the world can match -- especially in Istanbul where one side of the city is clearly European and the other side Asian. But in the main Turkey is a Muslim country and while this isn't automatically a bad thing, not all of the differences between their way of life and ours are to be smiled at.

Turkey has come on leaps and bounds in the reforms it has made in the pursuit of EU membership, but it is still very very conservative in some areas, especially the treatment of women and freedom of the press.

Journalists are regularly arrested in Turkey, and an entire newspaper staff recently resigned because the newspaper bosses signed a deal with the authorities over what news it would publish. Unfortunately even striving for EU accession has not brought much progress in this area.

Unlike women's rights and the treatment of women, where a great deal of progress has been made, especially at the central government level. However, many women are still paid less than their male counterparts and many more suffer mistreatment in the workplace, which goes unpunished by sympathetic employers -- that is sympathetic to the views of their abusers. Likewise police will often turn a blind eye to domestic violence, which is still common in Turkey. Women are beaten because their husband or their family decides their actions have brought shame on their family -- in the worst case the women are murdered and such things are accepted in society.

Developing Country:

From an investor's perspective Turkey being a developing country is a good thing for many reasons, centering on the fact that it leaves a lot of room for growth and a lot of room for development, but on the downside it also means a lot of things are under-developed. Looking at the touristic areas and the areas immediately surrounding them you would never think Turkey was a developing country, but travel off the beaten track for one reason or another you will often find poor quality roads, immense traffic congestion and worse.

Unemployment is also a factor in this, Turkish unemployment fell below 10% for the first time last April, but it is still too high by western standards, and the youth unemployment especially at 17.9%. Unemployment breeds poverty and you will see a lot of poverty off the beaten track in Turkey. According to the CIA World Factbook over 17% of the Turkish population lives below the poverty line. Going hand in hand with poverty is opportunistic crime, mostly this is nothing too dastardly just unauthorised tour guides and such like in the main touristic areas, but again, if you go off the beaten track...

Welcomed like a Foreigner

Turkey is renowned as one of the most welcoming places on earth, but even in Turkey foreigners are still treated very differently to the locals. This incllides higher property prices, higher rents and higher prices of everything they can get away with. For example foreigners can pay up to £20 for a meal that a local will pay £3 for.

EU Accession Problems

Most of the nef above are really only relevant if you plan to live or holiday in your Turkish property (because most people do), but there are also negatives for the pure investor as well. For a start Turkey has many obstacles to its EU accession, with Germany and Austria strongly against its accession, and France as well until Sarkozy was replaced by Hollande in the recent presidential election, and possibly still as no one yet knows Hollande's fill stance on the matter.

Sarkozy said straight out that Turkey is culturally incompatible with the EU, and while Turkey can make waves about the discriminatory tone of such remarks, until it accepts EU member Cyprus and opens its ports to the country it can't join anyway.

Currently the EU is looking very shaky indeed as several member states fight for their financial survival and even the Euro itself is in danger of collapsing. So, EU accession may not be the must it once was, but many people still see it as the only real sign of economic and social stability, and others seek it for the freedom of visa requirements, either way Turkey's problems with gaining access to the union are certainly a consideration in the cons box for foreign investors.

Border with Iraq

Turkey has a border with Iraq, but this is not as simple as it sounds. Where southern Turkey meets northern Iraq there is what can be called a buffer-zone. Northern Turkey is dominated by Kurdish residents. The Kurds want this zone to be Kurdistan and are fighting for such an outcome. This often leads to violence in Turkey and Iraq and Turkey is actively working for a peaceful solution.

Buying a Property in Turkey -- The Positives:

Mounting Volume of Positive Data

Just about every metric used to measure the property investment potential of a desination like Turkey is screaming invest now.

The economy is growing strongly, with 8.2% growth in 2010 and 6.6% last year making it the fastest growing economy in Europe, although growth is expected to slow this year this is as much by design as anything else.

Unemployment is falling, from 14.1% in 2009, to 12% in 2010 and under 10% in 2011 according to official data.

The population is growing rapidly in numbers and affluence, especially in the cities which provide the best job opportunities and are therefor attracting large migration from rural areas.

The banking sector is stable and strong; according to the Central Bank, mortgage lending increased by 20-25 percent in 2010 and 2011. This makes Turkey stand out as a strong contender, because thanks to the Basel III reform program increasing capital reserves that must be held against property, most European banks are closing lending on property. Meanwhile Turkish bank reserves are already above the new threshold thanks to the reforms the AK Party made in the wake of the 2001 financial crisis and so Turkey continues to lend for proeprty purchases as normal.

Political Stability: the AK Party was re-elected for its third term in the middle of last year, and in each victory it has secured a bigger majority than it held. This shows and is because the Turkish people are incredibly happy with the way their country is being run. This makes Turkey a politically stable country.

Fiscal Stability: in 2009 Turkey let its standby agreement with the IMF lapse and is expected to have paid all its debts to the IMF by 2013. Turkish public debt is currently running at around 40% (45% in 2009, 41% in 2010) of GDP, the limit to meet the Maastricht Criteria is 60% and the EU average is about 80%. Finally, Turkey's budget deficit is around 2% of GDP. This makes Turkey one of the most fiscally stable countries in Europe, although it must bring down its current account deficit.

Reforms

The AK Party has always strived to reform Turkey, to end the military involvement in government and the ensuing fraud that was damaging the Turkish economy constantly. Since taking office it has seriously reformed the country as it has sought to join the EU. These reforms culminated in the signing of a new constitution last year, hich effectively eradicates the military's remaining power in government, and includes a lot more on equal rights for women. The AK Party was also the one that allowed foreigners to buy property in Turkey, and has recently widened this with a new law removing the recprocity.

Infrastructure Development

This is also one of the AK Party's great strengths, in fact it is spending billions of Lira, pounds and dollars of bringing the infrastructure in the country up to scratch. This program will only intensify, especially in Istanbul, as Turkey is now a candidate for the 2020 Olympic Games, Recent years have seent the construction and expansion of many roads and new marinas, including the Altinkum marin.

Low Property Prices:

Despite recent growth, Turkish property prices are still among the lowest in Europe. Most foreigners go for newly built properties that are of a very good quality, therein combining high quality properties with low prices giving fantastic value for money.

Low Rate Mortgages Available

Unlike most of the world the Turkish bank system has survived the financial crisis largely unscathed and is still lending healthllly. As a result it is still possible to get mortgages in Turkey, and rates are currently very low as well.

Strong Rental Yields

Low property prices combined with the population growing in numbers and affluence, as well as growing tourism is leading to some very good yields on Turkish property. According to the Global Property Guide 6% is the average net yield in Istanbul residential property, and agents of holiday homes report similar yields on holiday lets.

Steady Price Growth

According to Gyoder Turkish property prices are growing at around 6-8% per year. This figure would have been a negative factor during the boom, but now we know it is much better to have slow and steady growth that is sustainble, rather than scintiillating growth inflating a bubble that will inevitably pop.

EU Accession Looks to be Getting Back on Track

Since having its EU application accepted in 2005 Turkey has opened only 14 of the 35 accession negotiating chapters and has closed just one. The process has gone from a snail's pace to frozen completely as Sarkozy became French President as he stated his belief that Turkey was culturally incompatible with the EU.

But now, France has a new President and all EU members have supported a new "Positive Agenda" that will see the EU and Turkey work together to create working groups (seven at first) each focussing on one chapter and helping to bring Turkish legislation more in line with that of the EU. However, as was mentioned above, Turkey's failure to recognise and open borders to EU member Cyprus is still a massive problem, especially with Cyprus now taking over the rotaing EU Presidency.

Conclusion:

As you can see, while Turkey has a lot going for it, it also has a lot of work to do before it will be as safe a place to invest in as the likes of France or Italy for example. However, many investors are looking to increase their risk appetite and Turkey is one of the hottest emerging markets in the world.

The BRIC economies have spent a decade at the curve of global economic growth, and now new groupings are tipped to take over. Turkey puts the T into two of the favourites, the MINT and CIVETS (Mexico, Indonesia, Nigeria and Turkey and Columbia, Indonesia, Vietname, Ecuador, Turkey and South Africa). Looking at Nigeria or Vietnam we can see that Turkey has the same growth potential, but is a much more stable and safe place to invest.

For almost every con there is a pro. We have given you them so that you can decide. Answer in the comments -- Have we won you over?

Article written by Liam Bailey on behalf of Turkish property developer Wise Move Homes, specialists in property in Altinkum.

Why Now is the Time to Buy Repossessed Property in Spain

2012-05-28T15:10:18+00:00

I write this type of article a lot, but this one will be different. Normally I would try to create a balanced picture of the strengths and weaknesses of the Spanish market and its current status in the recovery context, weighed off against the pros and cons of buying distressed property (speed, damage, real value etc). But this time I am going to tell you a scenario that makes now exactly the right time to buy repossessed property in Spain.

Love it or loathe it Spain is still the top choice for a British holiday, and while most people can only afford an all-inclusive break we all dream of a Spanish villa holiday, but the real dream for those who love a Spanish holiday is to own a Spanish villa.

In most places such dreams are far less accessible now than they were during the boom, even though prices are lower, because now there is no credit and cash-sales dominate. Not in Spain though, the Spanish banks are so desperate to offload repossessed property that they are offering easier finance than they were at the height of the boom.,

In a balanced article I would be criticising the Spanish banks and government for being in denial at the risk of prolonging the misery, but today I am going to indulge desire alone. Right now Spanish property is more accessible than it has been for years; repossessed property is cheap, and as I said the banks are offering big finance deals as well.

Polaris World was one of the biggest developers for the foreign market during the boom and it is now selling a large number of properties that have been repossessed by banks. The properties range from apartments at 65k EUR to villas at over 300k EUR, with the common discount being 50% on 2008 prices. But the clincher is the financing, on the smaller properties loans of 90% LTV are common, but on the bigger bank owned villas loans of 100% LTV become the norm.

When discussing large spacious bank owned holiday villas in Spain, arguably the best buys from Polaris World' selection can be found by looking at the Mar Menor resort. From there if you click through to its listings page using the view property button, and then select the villas tab, you can find a large selection of bank owned villas on the resort. The biggest villas are priced from 250k Euros up to 290k Euros and come with 100% finance.

For those on a lower budget, there is also a selection of bank owned 2 bed 2 bath villas on the resort starting from 165k Euro and that also come with 100% mortgages.

So as you can see, with the banks willing to lend 100% of the purchase price on heavily discounted repossessed villas in Spain, they become accessible to a wide range of possible purchasers, including most of you and me. You can ask, what about if Spanish property prices fall further, but when it comes to buying a holiday home, if you are getting a good deal for you and a mortgage you can afford, then why would you want to risk missing the right holiday home for you and your family?

Should I Sell My House Now or Wait?

2012-04-19T14:26:55+00:00

This is a common question among home-owners considering selling up, who are constantly weighing the balance of whether their home would fetch enough to move up the ladder, or to buy the home they need for their family, especially given the deposit requirements of the banks which are still much higher than they were during the up cycle.

Whatever way you slice it, the UK housing market is still not in great shape. Unless you have a prime address in Central London the price of your home will likely either have been stagnating or falling since 2010. That said, supply is still really low and despite the doom sayers doom saying we do appear to have left any major price corrections behind, for the moment at least, and it is unlikely that interest rates will be rising any time soon.

With those facts in mind, the only factor that is likely to make now a better time or a worse time to sell than any time in the near future, is the deposit requirements of the banks, which could bring more or less buyers, and/or make a difference in whether or not you can afford to buy again once you have sold. And in that vein, it is probably better that you go for it now rather than wait.

In January the Guardian revealed a strong resurgence in low deposit mortgages of 90% and 95% mortgages, amidst a general increase in deals available. But the article also cautioned that banks would likely tighten up again as the year progressed amid the weak economic backdrop.

However, if we look at the Moneyfacts website, which is where the Guardian took its data from, we see that the number of high LTV mortgages has continued to increase so far. In January the Guardian said that there were 41 95% mortgages on the market, up from 27 in 2011. According to Moneyfacts there are 61 95% mortgages on the market as of April. So, given that the economic backdrop could yet bring tightening on the banks part, now may well be the time to sell up and go for it.

Every Little Helps

When it comes to this balance, of getting enough for our home to buy our next one etc, then every saving helps. We no longer have to accept the 2% commission charged by high street estate agents, because there are now online estate agents, which offer much the same service at a fixed fee, or a much lower rate.

On top of that if you take the sole agency agreement with your agent, then you can also advertise on private sale websites, and if you find your own buyer then you will pay nothing to the agent at all. Look up dual-selling to find out more.

Is it Time to Invest in Spanish Property?

2012-04-10T12:22:49+00:00

Unfortunately instead of getting easier to answer the question of timing your investment in Spanish property it has got harder. People choosing to invest now are just as likely to be glad they did as they are to wish they had waited 6 months or regret it for the rest of their life.

This is because, since the financial crippled the world and the Spanish property market, the European sovereign debt crisis has exploded to the fore. So now we not only have the aspect of whether prices are still falling or have bottomed but we also have to worry about the prospect of the EU breaking up in part or even in full, and the effect that this could have on Spanish property investments.

Find out more about Spanish property

As for Prices...

The truth is (as much as it pains me to admit it) when it comes to prices, now could well be the right time to go for it. You never really know until its too late, because prices rising is the point when everyone knows for sure a market has bottomed. Again, as with so many aspects of this crisis the picture is fractured and broken; in some parts of Spain there are still more distressed properties than buyers and prices are stagnating with further falls impossible to rule out, while in some other parts of Spain the market has almost certainly bottomed.

Murcia springs to mind... Murcia is currently making the headlines in the property world, because demand is rising rapidly and prices have even started rising according to agents. It would certainly seem that now is the right time to go for it in Murcia, because prices look more likely to grow than fall, certainly in the mid-long term.

This is because of a triple-whammy of upside factors, including the fact that construction has finally started on the new Paramount theme park, which has caused authorities to extend the route of the Madrid bullet train to Murcia from 2014, as well as the new International Airport, Corvera which looks set to open this year.

Anyone wanting to take the plunge in Murcia is in luck, the region has many Polaris World resorts, the properties in which are currently being sold off at big discounts, contact Azure Overseas now to find out the latest opportunities.

As for the Other...

Unfortunately the picture is far less rosy when it comes to Spain's other problems. A couple of days ago Spain's problems again made the headlines, as investors forced higher yields on bonds, and snapped up securities that pay out in the event of a Spanish default. This has brought renewed worries that Spain may yet be forced to ask for international aid, although big players say it is in no danger yet.

Three countries have currently asked for financial assistance from the IMF, Ireland, Greece and Portugal, but Spain has a smaller problem with debt than those 3 do. Where Spain comes into the debt crisis is its public debt, plus its debt laden banks riddled with toxic assets, mainly real estate that they can't shift. The problem arises if the situation in Spain's banks worsens and forces the problem onto the government, which on top of its debt, borrowing costs and economic woes, the Spanish government couldn't handle on its own.

So, Go For It or What?

No one knows for sure whether Spain will eventually need financial aid to survive, and we know that the ECB hasn't the financial wherewithal to save it. So it comes down to Germany, and whether it would sacrifice Spain to save the EU, or whether it would do whatever it took to keep the EU together. Of course, if Italy and Spain both need help it may be too much for anyone to stop.

In this respect, it all comes down to educated guessery and hedging your bets. In fact, the best way to look at it is from the worst case scenario. Look at the properties, look at the prices and the rental market, and decide on whether that property would still be a good investment even if the EU crumbles and its value changes currency or whatever else the consequences are.

It is unlikely that Spain will ever close for business, so you will still have the tourist trade and strong rental demand on the right properties. And when all is said and done the most likely outcome is still that Spain will ride out the storm, although it may be 5-10 years before the economy is back on an even keel, but then, holiday home owners needn't care about that per se.

All in all, now is the time to buy in Spain, on certain properties in certain locations, so it should be looked at on a case by case basis. Take Murcia, it undoubtedly has a strong potential upside, and prices are drastically low, and go from there.

Finding a Safe Rewarding Property Investment in 2012

2012-03-24T14:04:43+00:00

It's a funny old overseas property world in 2012. Private overseas property investors are still weighing heavily on safety and security of the purchase, but as the Eurozone crumbles and inflation rises in the likes of the UK, shrinking the value of cash quicker than the abysmal interest rates can increase it, what is safe?

During the boom it was all about the returns. People were buying property abroad with less care and attention than they employed while buying a t-shirt; at least most people will have seen a t-shirt when they buy it, but many were buying property off the internet with nothing more than a computer generated image of what it would look like and the convincing word of a friendly agent. We are all a lot more cautious now, and in fact, returns have more than taken a back seat to the safety of the investment.

As a result the overseas property scene has completely changed. During the boom emerging markets were all the rage, the likes of Morocco and Tunisia springing up, the more exotic the better as long as the returns, or I should say the potential and/or promised returns were good it was all systems go. In the immediate aftermath of the crash the opposite was true, investors were barely touching anything apart from established markets like France, Italy and the Caribbean.

The Caribbean Leads the Overseas Property Recovery

In fact, the Caribbean was one of the first places to recover, not your cheap Caribbean markets like Dominican Republic, but places like St Kitts and Nevis for example. The logic was to buy in places were property had proven capable of holding its value, places where the wealthy had always been the main buyers, where prices hadn't been driven up by speculation, and where there was no rush to sell at reduced prices when things went bad.

Property in St Kitts and other places where property costs around £250,000 to £500,000 shone in particular, because they obviously have a wider pool of people who can afford to buy there, i.e. not exclusive to the super-rich. But St Kitts also benefited from its residency through investment program; who didn't dream of emigrating to a Caribbean beach when Northern Rock fell apart.

Changing Perspective of Safety

The logic is the same now for many buyers. French and Swiss ski property are still among the top choices for mid-range buyers, while the super-rich are predominantly buying in the likes of London and Paris. French leasebacks have also enjoyed a revival of late, as the government guaranteed returns reduce risk and increase safety. However, people don't get quite the same feeling of safety about buying in France and certainly in Italy with the potential for the collapse of the Euro still on the horizon.

On top of that, not everyone can afford to buy in those places, and optimism is once again creeping in, as people realise that there are great opportunities to profit from the global recovery. I wouldn't say that safety is taking a back-seat again, more that people's perspective of safety is becoming more pliable in order that they can benefit from slightly higher returns.

Turkey and Emerging Europe

Turkey is a good example of this at play. As I said, the Eurozone is crumbling and this is allowing markets like Turkey to stand out from the crowd. Turkey was once a fringe market popular only with holiday home buyers who had discovered it through tourism. But now Turkey stands out as being one of the strongest economies not only in Europe but the world, and also stable with low public debt a strong banking system, low priced property and solid returns.

Turkey's has the fastest growing population of Europe, and was the fastest growing economy in the world in the first half of 2011, with no figures yet for the second half. The population is growing fastest in the major cities, especially Istanbul, and the combination of the growing number and growing affluence of the population is causing incredible demand for property to buy and rent. According to the Global Property Guide Istanbul property is severely undervalued, with a per sqm price of just 2,386 euros making it the 8th cheapest major city in Europe.

Romania

Of course Turkey isn't the only emerging market offering good returns in Europe, but few can match it on the safety aspect. For example Romania has the potential to enjoy strong property price growth in the next 2-5 years, as property prices have fallen drastically during the crash, but the economy has shown strong growth for the last few quarters. This is a similar path to that of Latvia, which went from one of the worst performing to one of the strongest growing property markets in the world last year.

Romania is in the EU, which means it has passed a lot of checks as to its safety as a place to buy property. But it is not in the Euro, and this is definitely a plus at the moment.

Article written by Liam Bailey on behalf of overseas property agent Select Resorts. The firm is currently marketing property for sale in Turkey, land for sale in the Cayman Islands and resort property in St Kitts.

Why Buy St Kitts Property?

2012-03-20T13:37:45+00:00

St Kitts is currently a rising star in the world of overseas property. It is such a vast and varied island with so many wonderful things to draw and keep tourists from around the world, that you may assume the reasons for its current popularity would be equally varied, but it is my opinion that the reasons are far more simple when it comes to buying property in St Kitts.

The Residency By Investment Program

For me the residency is the single biggest factor in the current popularity of St Kitts property. When you purchase a property in St Kitts for $400,000 or more you automatically qualify for residency in the country. This is without doubt one of the biggest selling points of property in St Kitts today.

The UK is on a downward spiral in terms of its economy, what with all the austerity, but also there has been a near-constant slide in the quality of life in the UK over the last 30 years as well. Now you have gangs of youths tearing housing estates apart and making life a misery for older inhabitants, as well as the bigger issue of drugs and drug related crimes. While there are still some pockets of beauty in rural areas, for the most part the inner-cities are not good places to live anymore.

Across the Eurozone many people feel the same about the country they live in; if not because of drugs, crime or violence, then because of the austerity measures imposed by their respective government.

More and more people are considering emigration. So when they see that they can get automatic residency when they buy a property in St Kitts, and then research shows them just what a paradise the island is (if they don't already know it), then it goes very high on their shortlist of possible destinations.

Other Benefits of the Program

On top of the main benefit of automatic residency, the program also gives home buyers a whole host of other benefits, including:

Visa Free Travel

The program also gives home owners the ability to travel visa free to 100 destinations around the world including: Canada, Great Britain, Hong Kong, Liechtenstein, Ireland, Sweden, Switzerland and Schengen States of the European Union.

Favourable Tax Regime

Homeowners under the residency program pay no capital gains tax, no gift tax, no wealth tax and no inheritance tax.

World Becomes your Oyster

Being a resident of St Kitts and Nevis also makes it easier to obtain a residential permit for those who wish to go and live in Monaco, Switzerland, Andorra, United Kingdom, and Bermuda, Cayman Islands, Bahamas or other Caribbean countries.

Article Written by Liam Bailey on behalf of Select Resorts, an overseas property marketing agency currently marketing Turkish properties, property in St Kitts, land in the Cayman Islands and other investment opportunities.

Spanish Property Bargains Abound, But are they Safe?

2012-03-06T13:46:19+00:00

Spanish property is going for a song, a sad sad song of depression and woe, but also a cheap song, a very cheap song indeed. Undoubtedly the kind of prices you can currently buy Spanish properties for makes them bargains in the true meaning of the word, but are they really bargains; are they safe or will their value plummet further in the event of an EU collapse.

We have all heard of the PIIGS, Portugal, Ireland, Italy, Greece and Spain lumped together because of their huge volumes of sovereign debt coupled with severe recession (Greece, Ireland, Spain) or low growth (Italy, Portugal), giving them less ability to pay it back. Well, Spain is the second biggest of the PIIGS and after Portugal became the third country to need a bailout from the EU, Spain was set to be the fourth -- from Greece, to Ireland to Portugal the contagion was spreading up the GDP chain. This was no shock though, because Portugal's need for a bailout had long been regarded as inevitable by all but Lisbon.

Thank fully, whether or not Spain will need a bailout is looking far less inevitable, indeed, recently developments have begun to make this outcome less and less likely. Thank fully because the sheer size of the Spanish economy would almost certainly lead to more severe consequences for the EU, starting from the doubts as to whether it could actually afford the bailout in the first place.

These fears certainly had the potential to bring about their own worst outcome, but so far this has not been the case. The very next day after Portugal requested assistance, Spain successfully sold a three year bond, earning 4.1 billion Euros of a target 3.5-4.5 billion at yields lower than the last comparative sale.

The bonds sold at an average yield of 3.568pc, compared to 3.592pc at the last 3-year bond auction the month before.

"That should allay any contagion fears," said Peter Chatwell, rate strategist at Credit Agricole.

Since then Spanish bond prices have had their ups and downs, until December brought a new wave of confidence in debt. Spain was not in a sovereign debt crisis like Greece for example, its banks were the problem and the worry that their debts would become so unmanageable as to become a sovereign crisis. So, when the ECB agreed 489 billion Euros worth of three-year loans to the regions banks just before Christmas it staved off this possibility and sent Spanish borrowing costs into a constant decline.

Further help has since come from Greece and the EU agreeing the second bailout package in a last-ditch diplomatic effort last month. Following the decision the yield on ten year Spanish bonds fell 5 basis points to 5.11%, and arguably more importantly at the moment the spread on German Bunds (the extra yield investors demand for taking Spanish bonds instead of German Bunds) fell to as little as 308 basis points, the narrowest since Feb. 8.

This surge of positivity was followed on Feb 29th with the second ECB recapitalisation of European banks. This time the regions banks borrowed 529.5 billion euros for an unlimited period at rates as low as 1%.

Last Friday, 2 days after the ECB money-drop Spanish 10-year bonds were trading at 4.853 per cent, down from 4.970 per cent. Five per cent was the level that Spanish borrowing costs found after the last round of ECB loans, and now they are falling again, showing that investors may now believe that Spanish bank debts pose no sovereign threat, meaning an end to the contagion in Europe.

So on the face of it, it does seem like we are safe to start snapping up some of those Spanish property bargains. However, just below that there lies a vicious circle of irony. The banks' biggest problem is the level of toxic loans and repossessed properties on their balance sheets. So, if property investors go on a spree and buy up repossessed property and attached debts then they will likely be the cause of their own success, while at the same time if too few people feel this burst of confidence then those staying away will force the outcome to be negative.

According to recent data from the Bank of Spain, foreign property purchases increased by 27.8% in 2011 compared to 2010. So it seems that investors are feeling increased confidence that Spain can avoid the contagion and thereby help the EU back out of crisis. However, at the same time debt isn't the only thing Spanish property buyers have to be aware of.

Owners in the Andalucian town of Albox, Spain, are once again facing lengthy court battles to try and avoid the demolition of their homes. Worse, according to John Hillen of local protest group AUAN, "the homes were constructed with planning permission from the local council in 2002 and possess all of the necessary paperwork". This is a side of Spanish planning law that all investors should be aware of to cover all the bases.

Article Written by Liam Bailey on behalf of Select Resorts, an overseas property marketing agency currently marketing property in St Kitts, Turkish properties, land in the Cayman Islands and other investment opportunities.

Property Investment the Wise Choice in Any Economy

2012-01-27T12:28:00+00:00

Many people will be surprised at this title, but they will probably be one of the thousands of people who have lost out during one of the many market crashes around the world, and been put off for life. Definitely not one of the millions of people who have consistently made money through property investment over the long term and during many ups and downs.

Property sales crashed globally in about the final quarter of 2008, but by the second quarter of 2009 people were back out there and buying property. This is because; over the long term there is no safer investment than property.

By the second quarter of 2009 we had realised that the financial crisis was not going to completely wipe us all off the map, and the world's wealthy had a new threat to worry about, the falling value of cash. Currency fluctuations, inflation and abysmal interest on cash savings meant that cash was no longer a good thing to be holding in bulk. This triggered the gold rush, but as the price of gold soared the world's wealthy began looking for safe places to invest in property.

By the end of 2009 property investment funds and REITs were starting to turn profitable again, because they had been able to adjust their strategies. Stocks and shares are stocks and shares and bonds are bonds, but property is a versatile asset class.

For a start there are the many different property classes, residential, commercial, which are broken down into many more sub-classes, resort properties, hotels, offices, retail properties, industrial properties, social housing, luxury property. Then there are the investment vehicles, from actually buying property freehold, to the many fund options and REITs, with things like leasebacks and apartment-hotels with guaranteed buy-back the bridge in between. Not to mention investing in property debts, or providing financing options for developers. This diversity gave REITs room to move and to quickly adapt to the new reality.

When America lost its Triple AAA rating billions of dollars, euros and pounds were wiped away as stock markets crashed. But there wasn't a property in the world that saw its value slashed by the event. Over the long term property always goes up in value and you can make money during this time from renting it out.

Right now the American property market is in complete turmoil, with prices still falling after almost 5 years, but investment funds and REITs are buying apartment blocks by the handful. This is because as a consequence of all the repossessions and the constricted mortgage market there is unprecedented demand for rental accommodation in the US. Private investors are also benefiting from this, as they are able to buy distressed properties with tenants in place and yields of 6% and upwards ready to be made. The UK has experienced a similar phenomena and buy to let investors are also benefiting from that.

Around the world there are similar pockets of profitability and high returns to be found from property. Just in the fact that prices have fallen by double digit percentages in many countries presents the opportunity to earn above average rental yields and for strong capital appreciation when the recovery strengthens. And that is why property is the perfect investment for any economy.

During up cycles properties appreciate in value rapidly and can be sold fairly quickly. Thus investors are able to buy, rent out for a strong yield and then sell for a big capital gain, but in down cycles prices fall far faster than rents, increasing rental yields on new acquisitions and safe in the knowledge that the asset will regain its value and appreciate over the long term.

Portugal Property Still Reeling but Some Good News

2012-01-26T15:35:52+00:00

The Royal Institute of Chartered Surveyors has just released its latest data for December 2011 on the Portuguese residential property market in conjunction with Confidencial Imobiliario. It has to be said that the report, in its overview of the market is near identical to those that have recently gone before it:

The sales market is still in a lot of trouble, though not because of excess supply, simply for very low buyer numbers. Demand, supply and prices continued to fall in the sales market in November, meanwhile the rental market remained buoyant. The figures are pretty similar to the last index as well, so similar that I wouldn't bother including them but for my sub-conscious need to be thorough. The National Price balance moved from -70 to -66, while the National Confidence index improved slightly, from -60 to -52.

In fact, the most significant thing in the report for me was the fact that new homes fell in value faster than existing homes again in December. Before September existing homes continually fell in value faster than new homes, as developers continued to show resilience to the downturn, but this has changed since September. However, this might not become a long term trend, as in December estate agents surveyed predicted further decline in sales, while developers predicted that sales would remain stable at their current level.

Throughout the downturn developers in Portugal have largely resisted making any significant discounts, largely because sales have never completely crashed; in fact sales levels have stayed high enough for developers to stay afloat so they haven't had to make panic reductions. This is mainly because of overseas demand; as overseas buyers will usually buy in new developments. In any case, Portugal never experienced a boom, and so properties were not overvalued.

Despite their predictions, developers have clearly started to feel the pinch, and according to RICS sales are continuing to fall, not least because of the continued effects on consumer confidence caused by the looming Euro crisis. Whatever the reason, past experience (largely using Spain here) dictates that once developers are forced to start discounting properties, it is a slippery slope to larger and larger discounts. So 2012 could be a good year for investors in Portugal.

That said, according to CI Spokesperson, Ricardo Guimaraes investor activity is already picking up: " some agents note that there is increased transaction activity from investors, who are benefitting from price reductions and a strong lettings market," he said.

Article written by Liam Bailey on behalf of Select Resorts, an overseas property marketing agency currently marketing property for sale in Turkey, Portugal, Cape Verde and much more.

Top 5 Overseas Property Investment Hotspots for 2012

2011-12-31T16:03:50+00:00

It's been a funny old year 2011, with the funniest unfunny thing that happened being the epicentre of the international financial crisis shifting from the United States to the United Europe, sorry the European Union, no, sorry, the Eurozone, which is the countries within the European Union that adopted the Euro.

European Union isn't really the European Union anymore anyway. After several member nations, including the UK rejected a new treaty giving the ECB tighter controls over taxation and fiscal policy, it was decided that those in favour would come ratify the new treaty anyway. This effectively split the EU into two groups. Sarkozy went on to call those that adopted the new treaty the "super Euro", which is strange considering it was set up to strengthen a very weak Euro, and plays host to all those countries that were responsible for making it weak.

Anyhoo, whether for positive or negative reasons, the decision to use the UK's veto on the treaty will no doubt be a major part of what history writes about David Cameron's first term as PM.

Meanwhile the UK property market has continued -- as predicted by Halifax -- to "bobble around the bottom" for nearly 2 years now. Oh, except in London's top areas where prices continue to grow in double digits, (Land Registry data shows 4% growth in UK house prices in 2010, 14% growth in Chelsea and Knightsbridge). And, except in the rental market, which is experiencing a major boom fuelled by first time buyers inability to buy in their chosen area, either because they are priced out of the market, or they can't get a mortgage -- either because they can't afford the deposit or don't have a good enough credit rating.

Of course, London isn't the only city to have outperformed its host country; similar pictures have emerged in many established markets, with prime properties in prime cities doing much better than the rest of the markets in which they sit. Nor is the UK the only place where a constrained mortgage market and beffudled house purchase market is fuelling a rental boom; a similar picture is emerging in the US, and according to the latest survey by RICS in Portugal as well.

But, apart from that it's been all candy canes and sugar lumps all round. I'm joking of course, but investors have found opportunities this year, as always and as they will continue to do next year as well. Here's a few of the places they may be looking.

Turkey

Turkey is likely to continue in 2012 as it has in 2011. Right now Turkey is the fastest growing economy in the world. Although rising inflation is on the problem horizon, the government has earned a reputation for excellent fiscal management, so there is little doubt that it can soften the lines of inflation, especially with interest rates still so low. The budget deficit is a surplus, public debt is low and falling and record export growth is slowly but surely closing the trade and current account deficits.

Turkey attracts foreign investors investing in holiday homes, and those investing in residential buy to let properties, both are set to see a strong 2012.

Residential Investors

Residential property investors, aka buy to let investors are looking for locations where demand for property is outstripping supply, and also for an exit strategy.

When people make buy to let investments in foreign countries, they tend to focus on cities, where there is an emerging demand for housing. In Turkey the three largest cities are Istanbul, Izmir and Antalya. In all three the populations are growing rapidly in numbers and in affluence. Employment is growing and there is increasing migration to these cities from rural areas and surrounding countries. On top of that, access to credit, which is currently very loose is slowly being tightened. In any case, as we know, not everyone who needs a house can afford to buy.

Hard data shows that in Istanbul, where the population is growing fastest, developers simply cannot build fast enough to meet demand, and reports indicate that supply is at capacity in Izmir and Antalya as well. Thus, we can expect growing residential property investment in Turkey in 2012.

Holiday Home Investment

The biggest attraction for holiday home investors, is of course rapidly growing tourism to Turkey. Visitor numbers grew throughout the financial crisis, but growth slowed. According to data from the Turkish Ministry of Culture and Tourism, between 2006 and 2010 Turkish tourism grew by just over 2 million visitors per year on average. But looking closer we see the numbers increasing by 4.8 million between 2006 and 2007, 3 million between 2007 and 2008 and then slows to around 700,000 visitors between 2009 and 2010. By 2010 growth accelerates again by 100 percent, with 1.5 million more visitors in 2010 than in 2009, representing a growth of 5.74 percent on the year.

According to the latest figures, visitor numbers were up 12 percent in the first six months of this year compared to the same period last year. This has been confirmed by the UN World Tourism Organization, which reported 10.46 percent growth in visitors during the same period.

The data also shows that Antalya was the most popular destination, with 32.8% of the tourists entering Turkey through its air or maritime ports. As Antalya is also the third biggest city in Turkey, it provides investors with a very strong exit strategy. Thus, Antalya is set to be a top choice for holiday home investors, who will come in increasing numbers in 2012.

------

According to the Association of Turkish Real Estate Partners (GYODER) foreign purchases of Turkish property grew by 40% in 2010. We have every reason to predict further growth this year, and next year.

Brazil

When it comes to Brazil, I am recommending it now, for the same reason as I recommended it in my top 10 property hotspots for 2011. Brazil is one of the world's top emerging markets. The population is growing rapidly in numbers and in affluence and now foreigners can buy into affordable housing developments in the country's emerging cities. Natal and Sao Paulo are my two favourites.

Both are growing into great metropolis and demand for property to buy and rent is soaring as people move into the cities from neighbouring regions to find better employment. On top of that both are host cities for the 2014 World Cup and are currently having their infrastructure massively upgraded. Those who invested in the right properties in Brazil this year have enjoyed good rental yields and capital appreciation and we will see more of this in 2012.

Romania

The Romanian housing market has been in freefall for over 2 years, and prices are down by between 20% and 50% depending on what report you read, who you listen to or what area you look at. However, the economy is recovering strongly from the downturn. According to Eurostat data the Romanian economy grew 1.3% year on year in Q1, 1.9% year on year in Q2, and 4.4% year on year in Q3. Romania also has the advantage of not being in the Euro.

This is all very reminiscent of neighbouring Latvia, which also still uses its own currency. In 2009 and 2010 Latvia dominated the wrong end of the Global Property Guide index, joining Dubai in 50% plus price drops. But its economy also recovered well from the crisis. According to the same data Latvian GDP grew 3% year on year in Q1, 5.1% year on year in Q2 and 5.3% year on year in Q3. In the latest Global Property Guide index Latvia is the third best performing market, with prices up 13.3% in the year ending Q3. Investors have missed the bottom in Latvia, but have the chance to get in early in Romania.

America

All of the markets above are emerging markets, because I personally prefer emerging markets. However, in terms of property investment hotspots, the US will continue to present some great opportunities in 2012.

The US is still the world's superpower. While China is the emerging tiger, or whatever you want to call it, the US economy is still several times the size of China's in overall volume, in fact, it is bigger than China and India put together. America is having a hard time of it, but there is still plenty in reserve for it to ride out the crisis and return to growth.

Right now you can buy properties across America for 40 and 60 percent below their replacement build cost (self-explanatory, what it would cost to rebuild the property on its plot), which is a massive discount by any standard. What's more the US rental market is booming. Investors are able to buy cheap and earn good rental yields. This means that their investments are already bringing returns, but when the US eventually does recover (and few doubt it will) the potential gains will become huge.

Thailand

While the world's property markets crumbled, many in Asia went into crazy-bubbletastic-overdrive, with Singapore property setting new pricing records every other week. Not Thailand though, for a mixture of its political situation and its feeling the effects of the financial crisis, it was hit as hard as the rest of us. Now it is making a come back.

Property prices have fallen but not far in the main hotspots like Bangkok. The real opportunity lies in emerging cities like Pattaya for buy to let investors.

However, my personal tip is the holiday villa market on Phuket and Koh Samui. Here prices have totally crashed and you can get massive bargains on ultimate-luxury villas. These have always been filled by regional tourists, and with that region now past any scares tourism to Phuket and Koh Samui is set for a strong recovery in 2012 and over the coming 5 years.

2012 Set to See Surge of Foreign Property Investment in US

2011-12-19T14:48:01+00:00

In the last 18 months more and more Brits have joined buyers from all around the world in snapping up repossessed properties in Florida. The bargains available in the market have been nothing short of spectacular. There is currently a moratorium on evictions and foreclosures for the holiday period, which brought a 14% reduction in foreclosure notices issued in November compared to last year according to RealtyTrac.

It doesn't take a genius to work out that this will likely mean higher repossession numbers in the period after the festivities. In fact, in the same report RealtyTrac report the firm revealed higher numbers of foreclosed property auctions in the New Year, because of the expected sales-rush during the period. This will be a great time for investors to pick up bargains.

Early in the US housing bust, with tens-hundreds of thousands of homes being repossessed every week, and millions more becoming more and more desperate for a quick sale, houses were losing value so quickly that below market value became a misnomer.

The solution was to value homes based on their replacement build cost - the cost of rebuilding the home on the spot. While this is an inexact way of valuing properties, buyers can still see the value when they are buying a completed property for 40% or even 60% less than it would cost to build.

Sixty percent below replacement build cost is a fantastic deal, and one not found everywhere. According to Frank Crowley, director of Azure Overseas, a company currently marketing foreclosed property in Florida, finding a property at 60% below its replacement build cost is still "a diamond find".

"Although [properties at 60% below replacement build cost] are becoming more common as the crisis rolls on in Florida, 40 percent is still by far the most popular level of discount," he said.

It is no secret that the state of Florida has been hit harder than most by repossessions, and that within that the Orlando region has been particularly blighted. While this is bad news for the previous owners of those homes, it is great news for property investors. Orlando, Florida is the theme park capital of the world, and as such will always be a massive tourist destination. More than that a destination were people will often pay above average rates for peak periods in good properties.

Sure, the US recession is awful, and probably mismanaged by the Obama administration, but does anyone doubt that it will be back on top eventually? I know I don't. So, Florida property is a chance to earn good rental yields (low property prices + high rents + good occupancy = good yields), and then potentially massive capital appreciation when things recover. What's not to like? When 2012 kicks in and the repossession auctions are flying through, you can bet on massive numbers of foreign investors in attendance -- and who can blame them?

Overseas Property: Emerging Markets are Back!

2011-12-11T13:04:00+00:00

For about the last 18 months the majority of private-level (i.e. not institutional) overseas property buyers have fitted very neatly into 2 categories:

Wealth Investors

Wealth investors are those with considerable wealth, who have sought to de-liquefy their cash into solid and stable assets as a hedge against the eroding value of cash in most currencies. This first triggered the gold rush, and then as the price of gold soared more and more wealth investors turned to prime property in prime locations, which were seen as safe-havens.

Bargain Hunters

These are those who have been capitalising on the global property crash to pick up bargain properties in foreign countries.

Until recently the two buyer groups had one thing in common, they were both predominantly buying in established markets. The wealth investors were buying in prime cities like London and Paris, while the bargain hunters were focussing on severely depressed established markets, for example repossessed property in Florida.

However, now prime property is starting to lose its appeal, a: because some of the so-called safe-havens are starting to look a little less-safe, b: because prices have climbed so rapidly because of the demand from the rich, and c: because the other group of investors

Emerging markets are once again becoming more popular, particularly those that have either not seen recession or have emerged from it strongly.

Two of the hot favourites with investors are Turkey, and Thailand. Turkey saw demand throughout the crisis, as tourism continued to rise, but now that it is the fastest growing economy in the world, as well as one of the most stable and with a strong banking system it is definitely a hot tip. Property in Istanbul is particularly popular, because, as well as all the above its property is grossly undervalued compared to other capitals in Europe and it has the fastest growing population in Turkey, which has one of the fastest growing populations in the world. Because of the natural population growth, and migratory growth, combined with the rapidly rising affluence of the population developers cannot build fast enough to keep up with demand in Istanbul.

When it comes to Thailand property investment, you look away from the likes of Bangkok, to emerging cities such as Pattaya, which has the same fundamental strengths as Istanbul, rapid population growth and undervalued property. But Pattaya has the additional benefit of being extremely cheap, which reduces risk and increases the potential upside.

Brits Investing in Pensions Boost Cape Verde Property Market

2011-10-31T11:04:21+00:00

Gaining a reputation as an investment safe-haven, Cape Verde property is doing better now than it has been for many years.

As the credit crunch rolled over us like a Tsunami, it washed away practically all interest in buying overseas property. Sales of Cape Verde property to foreign buyers died off altogether. This was particularly unfortunate for developers like Resort Group International, which had just launched off plan sales for a new five star resort on Sal Island in the archipelago. With overseas property news dedicated to stories of Dubai and investors losing their shirts on off plan purchases, sales of off plan property dropped off around the world including Cape Verde.

Many developments in Cape Verde, including the Tortuga Beach and Spa Resort were postponed, and indeed shelved to await better climes. But now that resort has opened 100% sold out, and the same firm has also sold out in the second resort of three on Sal Island, and launched off plan sales of its third. By all accounts Cape Verde is experiencing what could be called a surge of overseas demand, with demand particularly strong from British buyers, and particularly for off plan properties. With Britain still far from being out of the woods, and Europe still wilting, one has to ask the question: what's changed?

Well, it is partly to do with the fact that confidence is generally returning to global economies, partly to do with the fact that the UK economic recovery is solidifying, but it is mostly because of a growing desire for Brits to invest in their own pension funds, and the fact that Cape Verde property is an investment that is both safe and capable of bringing good returns.

The British pension was a stalwart of the British working man's culture, with all of us living under the security that it was a state pension for all. Now it is looking increasingly shaky. We are all living longer now, and if anything more and more people with each generation have an affliction to working for a living. Because of this combo, we are looking likely to see more people claiming state pension that working to support it, and for the first time the policy of a state pension for all is in real danger.

This is not exactly a minutes old problem, and for the last few years more and more of us have been paying into pensions. Unfortunately, most people went the easy route of high-street pension savings, and lost most of their retirement fund when the stock markets crashed.

So now, the British people felt the same strong need to build their own pensions, and now the need to have control over their own investments. Enter the Self Invested Personal Pension stage left. Through a SIPP we can invest in stocks and shares in recognised global exchanges, as well as gilts, bonds and commercial property.

This includes resort and hotel properties like the ones mentioned above, provided the buyer is putting their investment under the management of the commercial resort. SIPP investors are the predominant drivers of the sales surge on Cape Verde. This is both because Cape Verde has become known as a safe place to invest, and also because the resort properties on the island are pretty much shouting out as the perfect SIPP investments.

SIPP investors want to make as much money as they can for their retirement. Most will have some exposure to stocks and shares for the high return, but more exposure to safer investments like Bonds, and commercial property. Property is a good SIPP investment, because the money is held in a safe asset that usually sees its value appreciate over the long term, it earns rental returns year in year out (when chosen well) and then a capital boost when sold. Cape Verde property is a particularly good long term bet, because of its growing popularity and lack of building space.

Lest we not forget Cape Verde's key strength, namely that it offers all the attributes of the Caribbean, but within a short haul flight of Britain and Europe. This is why tourism to Cape Verde grew so strongly before the crunch, and why it is returning to that growth now as international travel recovers strongly. Cape Verde property prices are also a lot lower than comparable destinations in the Caribbean.

According to Resort Group International 94% of buyers in the Tortuga Beach Resort and Spa were British, and many were buying as part of a SIPP. They said that SIPP buyers were also predominant in the 1400 sales of the Dunas Beach Resort, and are expecting the final resort in the 3 resort village, the Llana Beach Hotel (between Tortuga and Dunas) to also sell out rapidly with heavy demand coming in from SIPP buyers.

SIPP investors choosing resort investments are looking for a strong brand, where the rental management carries the potential of high occupancy and therefore good returns. The three Resort Group International properties are under the Sol Melia brand. Sol Melia has a turnover in excess of €1 billion, 2 million registered customers and 4.5 million hits per month on their online network, and on all three phases the rentals were to be pooled between owners of similar units.

Thanks goes to overseas property agent Select Resorts for providing some of the facts and info for this article. The firm is currently marketing SIPP properties in Cape Verde and land for sale in the Cayman Islands.

UK Rents Rise Across the Board in September

2011-10-21T22:17:35+00:00

Rents rose in all UK regions in September for the first time on record according to LSL property services in their latest buy to let index.

LSL Property Services might not ring a bell and you could doubt the validity of their data, but few of us haven't heard of Reeds Rains agency network, which LSL is the parent company of, and Your Move is also under their belt. In fact the data is based on a representative sample of 18,000 properties across the UK, which shows that the average rent in England and Wales rose by 0.7% to £718 per month, surpassing the previous record high of £713 in August 2011.

"With annual rental inflation at 4.3%, the average rent is now £29 per calendar month higher than September 2010. The average yield in September rose from 5.2% to 5.3%," the company told OPP this week.

"Record rental highs are now being experienced in London, the South-East, Yorkshire and the Humber, the East of England, Wales and the East Midlands."

Though rents are growing across the board, the good old north south expanse (divide no longer does it justice) is not being closed, although it is less pronounced in LSL's rental data than in Rightmove's latest asking price survey. According to LSL the largest rental increase was in the south East of England, with 1.8%, followed by the East Midlands with 1.1%. Meanwhile the west midlands and the north east of England saw rents grow by just 0.2% and 0.3% respectively. In London rents were up by 5.8%.

According to Rightmove's latest data asking prices grew 5.2% in London compared to the national average of 1.2%.

Speaking to OPP, David Brown, commercial director of LSL said:

"It's not just a regional phenomenon, localised to London and the South-East -- rents are rising across the board. And, in areas of high demand, competition is driving up rents at a faster rate than elsewhere -- but no region has been immune to the growing demand for rental homes from frustrated buyers.

"In many cases, buying a home is now cheaper on a monthly basis -- provided renters can get past the stumbling block of the substantial deposit requirements," says Brown. "But for the majority, saving a £25,000 deposit is a herculean task. As things stand, we won't see competition among prospective tenants diminish without a substantial expansion in the supply of rental properties available on the market."

Cheap Property Abroad Making a Comeback

2011-09-30T19:11:05+00:00

During the boom cheap property abroad was all the rage, practically any Tom, Dick or Harry could get a loan, and you could buy properties in emerging markets for as little as £10k, well you could see the appeal.

This was a chance for the little guy to get into the millionaire-making world of buy to let investing. Unfortunately it made far more shattered dreamscapes than millionaires as the world and its property market collapsed.

Since then, cheap property has been frowned upon, not least because it is mostly off plan which was the hated cause of so much of the shattered dreams and lost thousands.

But off plan property was not the cause; the people who were buying by the millions with less research than they would buy a t-shirt were the cause of their own demise. None the less cheap property suffered a shocking lack of demand in the last few years, despite the crushing reduction we have seen in average disposable incomes. If not for the blame laid upon it, then because pretty much the only people buying property were those of a wealthy status, and they were buying into the safe-haven of prime property.

But now it is coming back in, not least because of the exceptional deals to be found in Hurghada, and not least of which is the Tiba range, according to Frank Crowley director of Azure Overseas, he said:

"Today's buyer, whether spending 6 thousand or 6 million, is doing a serious amount of research, especially on off plan property. One of the main things they are checking for is whether or not the developer has any successful developments before. Tiba Paradise offers apartments in a well equipped Hurghada resort for just £6k, and there are 5 previous developments in the Tiba range, at least one of which is fully completed, and the others at various stages of development."

Azure Overseas is currently marketing the Tiba Paradise development, as part of a large portfolio of Egypt property for sale.

St Kitts Property Sales Boosted by Financial Volatility

2011-09-30T13:33:00+00:00

Buy me a bar of St Kitts property? You are forgiven for thinking, what the hell is he on about (unless you are Australian), but I couldn't resist the metaphor between Caribbean property and gold. Since the international financial crisis started sucking the value of cash like a vampire on the ceratoid artery, those with wealth have been putting their cash savings into gold, and the value of gold has skyrocketed. Since the price of gold went crazy, sales of property in what have become known as safe-havens has started to grow almost as quickly.

The safe-havens are where property has held its value against the downturn, and this is predominantly pricey locations, where property has always been bought by wealthy lifestyle buyers over speculative investors. As you'd expect many Caribbean locations fit into this box.

St Kitts is certainly one of those locations. This can be seen in the price of the Ocean's Edge resort development, currently being marketed by Savills affiliate overseas property agent Select Resorts. Even now, 4 years into the financial crisis (longer in the US) you can't buy a property in this development for under $372,000.

Despite the doomsayers, many wealthy people have barely been affected by the financial downturn, and as a result have not had to sell off assets at a rapid rate. Property prices are based on what homes in the area around them sell for, so when you have a location of wealthy owners holding their prices then real estate in the area holds its value.

Likewise developers and agents don't need to sell in volume, because this is not the intention nor the necessity in such markets. While developers in Bulgaria must sell 30 properties to make £400,000, Caribbean property developers can make that in one sale, and in fact in recent times they have been making much more.

Sales of St Kitts property, and that of the wider Caribbean have been recovering since the second half of 2009. This is when the doomsday fears subsided; the wealthy still had all their money and were keen to get it out of devaluing currencies and into something safer like property.

St Lucia, Barbados, Grenada and Trinidad and Tobago became known as safe havens and investors piled in, but St Kitts and Nevis had an ace up their sleeve to make them even more appealing to wealthy buyers. Namely, an economic citizenship program that saw buyers of property costing $350k or more granted citizenship and a slew of tax benefits to go with. Tax benefits include no world income taxation, no personal tax, no restriction on the repatriation of profits and imported capital, no inheritance tax, no withholding tax for nationals living abroad and no tax credits.

Understandably, the tax benefits combined with the safety of property in St Kitts as an asset has led to a great recovery in sales over the last 18 months.

How SIPPs Have Helped the Overseas Property Investment Recovery

2011-09-27T21:17:44+00:00

The last blow was dealt to overseas property sales in the last quarter of 2008. This is when all the markets that all the bulls had predicted would keep us all afloat sank like all the rest; markets like Brazil, Panama, Thailand (Koh Samui and Phuket), Malaysia and other emerging markets.

This was long after the first stock market drops in the US, UK and around the world; in fact, by this time the UK FTSE had lost trillions of pounds. Of course there were many consequences of this, but one of the biggest was the losses of pension funds, which meant millions of people in the UK lost their live savings, and were faced with having less for their pension than they even paid in throughout their lives, let alone what they needed to live on. And this, at a time when we are living longer, to the point where there are more people drawing state pensions than earning to fund it.

So, pensions went to the forefront of all our minds, and sales of standard pension investments plummeted even harder than property sales. This heralded a new type of pension investment in the UK; the Self Invested Pension Plan. This allows people to open a tax efficient fund in their own name, and make their own investments that become part of their pension fund.

SIPP investors can invest in the following as part of a SIPP, UK Equities (including Investment Trusts AIM Shares & ETFs,) Gilts, Bonds, regulated Unit Trusts, & OEICs, Shares in recognised overseas Stock Markets (NYSE, NASDAQ, CAC to name but a few), and Commercial Property.

You will see no holiday homes or residential property on that list, yet most of us have heard about the huge successes of overseas property in Cape Verde, Turkey and the Cayman Islands, which have sold out almost completely to SIPP investors in recent years. This is because they are resort properties, holiday homes under hotel/resort (commercial) management giving the owner free usage as part of the deal.

SIPPs quickly saw rising popularity, and resort properties are becoming extremely popular SIPP investments. The two are a match made in heaven; properties for sale in established resorts will tend to offer guaranteed rental yields as part of their rental management packages, and/or guaranteed buy back deals. They are also serviced making them a hands-free investment. So, they are not only allowable as part of a SIPP, but perfect as SIPP investments. As a result of this, many resorts aimed at the UK market, which had seen sales plummet, have enjoyed a strong recovery in sales.

Before the crash, UK investors were a dominant force in overseas property sales, and their exodus was a big hole in the industry. While that hole is a long way from being closed, growth in SIPP investments is helping to close it faster.

The Tortuga Beach and Spa Resort on Sal Island Cape Verde is a prime example. It fell off the face of the earth when the crisis rolled in. But it has just announced its launch 100% sold out, with 94% of units going to British buyers, and most of them investing as part of a SIPP. The development offers a free furniture pack, a 10% guaranteed yield in the first year, and an excellent rental management package to ensure a solid yield each year after.

Cape Verde is a growing tourist spot, which is protected by nature itself from over-development. This means that prices are practically certain to appreciate over the long term, as increasing tourism pushes up demand for holiday homes, and the land runs out to build new units. Buying into an established resort is a safety net for rental returns, and even without a buy back agreement appreciation over the mid-long term is also a pretty safe bet.

The Tortuga Beach resort was developed as a Melia brand resort, the next resort in the chain was Dunas Beach Resort, also on Sal. It is also 100% sold out now, again mostly to Brits, and heavily to SIPP investors. Llana Beach Hotel is the next and final development in the chain. LLana Beach is a five star hotel located in between Tortuga and Dunas, with each unit being serviced and managed as part of the Melia hotel brand. With the success of the first two this is expected to be very popular with SIPP investors.

SIPPs were born out of the ashes of traditional pension funds, as an investment fund that we ourselves could manage. Most SIPP investors will have some exposure to the high returns of the stock market, but most will have a larger exposure to the much safer investment of property, and you won't find many commercial property investments with a structure guaranteeing the returns being offered on resort properties like the one detailed above.

Another example is land plots in Dolphin Estates on the Cayman Island of Brac offering a guaranteed 20% return over 5 years. The investor can take the return as an annual yield or as a buy-back after the 5 years. But the best option could be to forsake the annual yield, and try to sell on the open market in the fourth year. That way, you get whatever the return is in actual appreciation, as well as the 20% you can collect from the developer.

Those are just two examples of SIPPable overseas property investments. There are many more out there, and investment in them is growing rapidly.

Could 2012 Be The First Year Of The Real Global Property Recovery?

2011-09-20T15:34:24+00:00

Now is the time to buy overseas property. This has been a popular line for the last 2 years, one that was harder than many thought it would be to sell in 2009, but has been getting a lot easier for the last 12-18 months. With many reports of markets bottoming, could 2012 be the first year of the real global property recovery?

Dubai property crashed, Spanish property crashed, American property crashed, British property crashed, and there were many more crashes around the world, if none as dramatic as the aforementioned trio. Immediately bargains became available in those markets, but it didn't immediately become the right time to buy property there for foreigners.

In Spain, more property had been built during the boom than in France, Germany and Italy put together and now with no one buying there were millions of homes in overstock. At the same time Spain's problem with corruption in the property market was taking centre stage as millions of Brits joined buyers from around the world in having their properties taken away because they had been illegally built for one reason or another.

In a similar situation to Dubai, those caught up in the Spanish property frauds were innocent victims, but their pain could have been spared had they done sufficient research. People were still buying in Dubai long after well respected regional investment bank EFG Hermes had pointed out the developing problem with oversupply.

In America millions upon millions of people, Americans and those who had bought from around the world lost their homes to repossession. In Britain the repossession problem was as bad, but obviously the numbers were a lot smaller. The American crash started in 2006 and worsened throughout 2007 when the British housing market began to fall. Both were in a drastically ill state by the end of 2008.

These crashes almost completely abolished buying overseas property, there was barely a sale anywhere at the end of 2008 and into 2009. The buyers that arose like phoenix from the flames were a savvier bunch who would not fall prey to any such fates as those who had lost out so badly before them.

Spanish property prices might be low, but were they as low as they were going to be, American repossessions might be cheap but they may not be a bargain. The new breed of overseas property buyer did their homework, but thankfully they did start to buy.

At the beginning of 2009, there was talk of Spanish property having only fallen 5-10 percent according to the government index, despite agents reporting falls of between 20 and 40 percent in some of the worst hit areas. We started to hear reports sales activity, but only when developers offered discounts of 20%. At the same time buying distressed properties in America began to take off, and there were even reports of Irish buyers buying in Portugal. Sales have been increasing gradually ever since.

Now, we have reports that Spanish property prices have hit bottom. We have heard it many times before but evidence is mounting that this is for real. Andalucia-based property search agent Barbara Wood reports prices at bottom and savvy investors picking up properties at the right price. Wood cites the example of Vera, a development in Almeria province. The units started life at €168,000. After the developer folded, a Spanish bank took them on and halved the price. But only now, with another 35% off at around €55,000, are they selling.

In America we hear reports of foreign investors arriving in Atlanta by the bus load and buy, buy, buying up units, but again, only units at the right price. American property was first being sold at below market value like everywhere else, but value was sliding so fast, and so varied across the country, that investors didn't feel safe that the properties really were below market value. To combat this sellers began selling at prices relational to build replacement cost.

The story of bus-loads covered WMI Capital, which is marketing refurbished repos, with 2 bedroom townhouses being sold at under £40k with tenants in place, and rental management as part of the agreement, it is easy to see the appeal. There are similar reports coming from towns and regions across the state of Florida, where property is available at up to 60% below its replacement build cost, so again the bargains and the investment potential are undeniable.

In Britain the situation is complicated. Prices fell in 2007 and 2008 with up to 20% coming off the national average, and more coming off certain areas. But the national average rose again in 2009, and stagnated in 2010. We have record low interest rates, but the majority of first time buyers can't afford the 10% deposit. This is leading to record rental demand, fuelling rising rents and occupancy, and leading to increasing sales from investors. But even with this, prices are either falling or stagnating most everywhere outside of London and the south.

In Dubai there have been very few signals of hope, but even there we have heard reports that prices just can't go any lower. Still the oversupply remains a huge problem, and of the markets that crashed Dubai still looks furthest from recovery.

At the same time we have the emerging markets like Turkey, which are showing exceptional growth in these trying times. According to the Turkish Association of Real Estate Investors (GYODER), foreign sales of Turkey property grew 40% in 2010. PriceWaterHouseCoopers have listed Istanbul as the world's top city for property investment in 2009 and 2010, and all signs point to even further growth in sales to foreigners this year.

In Brazil there is the weakness of the lack of mortgage finance to foreigners, but even there we are hearing of exceptional demand from foreign investors. Investors are particularly keen on buying into affordable housing developments in 2nd tier cities like Sao Paulo and Natal, where growing affluence and the shortage of quality housing and mortgages is fuelling incredible rental demand.

There are many more success stories around the world but it boils down to this. Crashing markets saw respite in 2009 fuelled by government stimuli. Everyone thought 2010 would be even better but instead it added another year to the crash, and 2011 a third in most markets. So, with between 2 and 3 years of falling and stagnating prices, investors are giving reports of bottom more benefit from doubt than they have before. This is opening up possibilities, and research is finding opportunities. All the signs say point to 2012 being the first year of the real global property recovery.

The Rain in Spain Falls Mainly on the Property Market

2011-09-13T23:03:48+00:00

Unbelievable. Just days after Money Observer reported the first signs of recovery in the Spanish property market, we learn that sales have fallen to their lowest level in two years. Data released by the National Statistics Institute in Madrid yesterday shows that sales of Spanish property fell 35% year on year in July, marking the fifth straight month of decline and following a 23% decline in June.

The data is confirmed by the Ministry of Public Works and Housing which recently reports home sales down 41% in Q2, following a decline of 31% in the previous quarter. Meanwhile the National Statistics Institute reported a further 42% year on year decline in mortgages in June.

All very miserable, but it is little wonder. Spain is about as heavily in debt as Greece and with higher unemployment, in fact Spain's 21% unemployment rate is the highest in Europe. Meanwhile there is still a huge problem remaining from the massive overdevelopment that saw more homes built in Spain during the boom than Italy and Germany put together. Even now experts put the glut of unsold homes at 800k to 1 million.

In fairness to Money Observer, they weren't proclaiming the complete turnaround in the market, simply saying that it looked like prices had fallen far enough, and that experienced investors were picking up some good deals. The consensus of expert opinion, partial and otherwise agrees with both assertions.

Spanish-Living.com managing director Adrian Warriner told OPP that the price falls in Spain are now at the point where investors should start to jump in. Loations such as Nueva Andalucia, San Pedro and Guadalmina could do well says Warriner because because they "provide easy access to upmarket hotspots like Marbella and Puerto Banus".

International Property Investment Reigning Over Stock-Market Ashes

2011-08-24T13:54:19+00:00

Once again we are seeing bricks-and-mortar property investment standing tall as one of the safest forms of investment on the global market. The ashes of stock markets and share values are still blowing around the feet of investment properties everywhere, lingering from the latest fire-sale-fuelled stock market crash.

For those that don't know, August 5th 2011 will go down as the day America's first black President presided over America's first ever downgrade by a ratings agency. Standard and Poor downgraded US bonds from the top AAA rating AA+.

On top of the European sovereign debt crisis, which is still continuing to worsen, and the fact that the UK and US are still struggling to find reliable growth, this was the last straw. The straw broke the camel's back and triggered a huge global share sell off, the likes of which the world has seen only once before, at the start of the international financial crisis.

The UK FTSE 100 index fell by over 100 points per day over the 4 days ending August 9, the most severe correction the index has ever recorded. During this period the global stock markets lost a collective 8 trillion US dollars, and that is counting a rally which added 1 trillion on the 9th itself.

And that is the point; the volatility, how quickly investors' sentiments can change when they are all looking at those boards. Once the selling starts it is so easy for everyone to jump on the bandwagon.

Eight trillion US dollars off the value of global stock markets sounds drastic, but it also sounds distant, like the effect of it on our day to day lives is exaggerated. But nowadays we are all being told to invest in our own pensions. Most pension funds invest in stocks and shares, and so pension funds lost billions of dollars in the crash. Pension funds lost billions in the last crash, and were only just finding their feet again. So of course, the latest crash has heralded fresh fears for our pensions.

Meanwhile you have property. During the stock market crash no more people were foreclosed upon than normal in any country in the world. No more tenants quit their homes or flats than normal, and house prices and rents neither rose nor fell any quicker than they had been over their quarterly averages in most countries in the world.

Property investments make their money from tenants; people are always going to need somewhere to stay, and businesses are always going to need premises. Nature stacks the odds in our favour; because they have stopped making land, so the amount of available space to build on is only going to decrease.

Carefully chosen buy to let investment properties will pretty much always make money over the long term, with capital appreciation and net rental income added together. Likewise, holiday home investments will almost always make enough to make them viable, but again only when they are carefully chosen based on supply/demand dynamics.

But arguably the best thing about property is that we can now invest in property as a form of investment for our pensions. In the wake of the last crash the government came up with SIPPs, Self Invested Pension Plans. SIPPs allow us to choose our own investments, from funds, shares, and real estate including commercial and residential real estate as well as investment in real estate investment trusts etc, and put them all into one wrapper.

"Where SIPPs really come into their own is in the tax-relief offered by the government," said Max Bielby of Select Property. "Every UK resident investing in a SIPP will automatically get basic-rate tax-relief on the invested sum, which means the government will add 20% to the value of your SIPP for the invested amount. In many cases additional relief can be claimed via the investor's tax return, taking the total relief up to 50%."

Select Property is currently marketing overseas property for sale, including many properties which can be invested in via SIPPs.

UK House Prices Up 0.3%, Hip Hip Hooray, Hip Hip...

2011-08-10T07:59:42+00:00

I feel bad writing about what seems like a triviality given the rioting that is going on up and down the country, but I just had to. I read a report filled with glee that house prices had risen 0.3% month on month in July in the Halifax index, yet we all know deep down that the UK housing market is still in a whole heap of trouble, with hardly anyone buying or selling, and first time buyers -- the ones who do want to buy -- forced to rent because they are unable to buy.

The latest report from the Royal Institute of Chartered Surveyors confirmed this. Respondents to the latest RICS survey reported the lowest average number of buyers since the summer of 2009. They also reported house prices falling for the third straight month, albeit at a slower pace.

It is true what Martin Ellis (along with practically all market bulls) says, the record low interest rates are keeping demand stable at its low level, stable enough to stave off severe price falls against record low supply levels. But this is hardly what we want.

While we are under the illusion that this stability is a good thing, sellers aren't being forced to face facts and drop prices, so the number of buyers isn't going to increase, supply isn't going to increase, banks aren't going to be forced to better assist first time buyers, and this depression is just going to linger on. Not to mention what it is doing to the construction industry.

The only ones who are happy with the current status quo are landlords. According to tenant referencing agent HomeLet the average UK rental rate increased 2.2% in July, to the three year high of £767. The company put the increase down to the dwindling number of people in the UK able to buy their own home.

This is strange, given that housing affordability for first time buyers is at an 8 year high, again this is according to the Halifax, in its latest First Time Buyer Review. Yes, thanks to the low interest rate and price stagnation homes are technically more affordable, the trouble is raising the 10% (or more) deposit needed to get these wonderful affordable-rate-loans.

As I have been saying for the last 2 years plus, house prices need to fall further in order to get this market back on its feet. Yes, homes are more affordable than they have been for years, but if you take the low rates out of the equation, as deposit requirements are doing for most buyers, then this shows the true picture.

During the last crash house prices fell until the average price was 2.2 times the average salary, only then did the market recover and start to grow. The Halifax is still judging affordability on average prices of 4.0 times the average salary, and even then housing is considered affordable in only 48% of UK districts. Mark my words, the market won't recover until prices fall further, and if they don't fall directly, we will just have to wait till inflation does the job. Of course, with the government almost certain to let inflation ease our debt burden, that may not take as long as it should.

Nothing Says Sort Yourself Out Like an Unprecedented US Downgrade

2011-08-08T22:42:22+00:00

I am sure that I could have titled this article Oh My God I Can't Believe It, or just Oh My God even and most people would have known what the article was going to be about. For anyone in the dark; international markets have crashed again because ratings agency Standard and Poor took the unprecedented step of downgrading US sovereign debt from the highest triple-A rating to AA+, citing the high deficit and failure of Congress and the Administration to reach an agreement on how to tackle it.

It is bad enough that this, on top of the worsening European crisis was enough to topple the -- house-of-cards -- global economy and send it into a second spiralling downturn, with stock markets losing trillions around the world. But worse is the fact that the US administration is exhausting more energy trying to fight the decision and throwing accusations and insults at S&P and Congress than it is at trying to finally come to an agreement on how to reduce the deficit.

The one thing we can be thankful for is that this shock downgrade will likely give the warring factions in the US government the wake up call it needs to get this ridiculous situation resolved.

Obama, his administration, the Senate and Congress all know that they need to reduce the deficit, but they simply can't agree on how to go about it. It would be funny if it weren't so tragic, several developed European economies are in real danger of defaulting on their debt, and the global economy pulls itself apart because America's government can't decide whether to spend less on the healthcare of its elderly or take more from the wealthy (in taxes).

Obama has voiced hope that the downgrade will indeed be a wake-up call for the squabbling parties (read children if you like). In all likelihood his hopes will be realised. The world almost went to hell in 2008. During a fragile recovery and knowing the state of Europe, it is unlikely that those warring in America would have let their situation continue if they had known that it would lead to America being downgraded and, as a result, to another mini-collapse of the global economy.

Now that they have been downgraded, and seen just a taste of the effect US wobbles can have on the global economy, I am (almost) sure that they will get it together and fast.

Foreign Purchases to Increase in Turkish Property Market in 2011

2011-07-16T13:45:37+00:00

According to the Turkish association of real estate investment companies, foreign purchases of Turkish property grew by 40% in 2010 compared to 2009. It is hardly a coincidence that such growth took place in a year of rapid economic growth, and almost unprecedented economic stability in the country. Given that this growth seems set to continue or accelerate, and the economy remains stable, it is a fairly safe bet that foreign purchases will also increase further this year.

After a yearlong recession the Turkish economy shot into recovery with a GDP growth of 6.4% year on year in the final quarter of 2009. This set the starting point for a blistering first half to 2010, with growth of 11.7% in Q1 and 10.3% in Q2 being talked down because of the poor performance the year before. Turkey went on to finish the year with growth of 8.9%.

At the same time years of fiscal responsibility and paying down debt, as well as the banking reforms made in the wake of the 2001 Turkish crash, began to pay off for Turkey, as inflation fell to the 41 year low of 6.4% in 2010, despite record low interest rates. The budget deficit also fell to around 2% and public debt to 45% (the EU average was 80%).

Of course this stability and growth played a part in the growing demand from foreign buyers, if not increasing the number of pure investors (residential buy to let investors) then increasing the number of holiday home investors (those who buy a holiday home that they also want to earn income as an investment).

Speaking of holiday homes, Turkish tourism, which continued to grow throughout the financial crisis, grew 5.7% in 2010 according to data from the tourism ministry. As most people concede increasing tourism usually translates to increasing holiday home sales, especially in times of economic prosperity. So it is entirely likely that this also played a part in the 40% growth in foreign purchases.

The Turkish economy has continued to grow strongly in Q1 2011, in fact it has accelerated, with 11% GDP growth making Turkey now the fastest growing economy in the world. According to a HSBC report public debt has now fallen to 41%, and the budget deficit turned to a surplus. The latest data from the tourism ministry shows tourism growth also accelerating. The ministry reported a 15% year on year growth in visitors in the first 5 months of 2011.

According to data from GYODER property prices are also growing strongly but steadily. The association's monthly index of new home prices shows annual growth of about 6% per year for the last 6 months.

With growth continuing and the economy remaining stable in 2011, it is highly likely that we will see a further increase in sales to foreigners when data becomes available for this year.

Thanks to Turkey property agent Spot Blue for the heads up on GYODER's index.

UK House Prices Set for Big Falls

2011-07-15T07:19:13+00:00

Well, it's been a while since I covered the UK housing market, or more specifically the situation with UK house prices. The last time I did I covered the modest house price rise in January, and repeated the same line; house price rises when homes are unaffordable are only storing up trouble for a bigger correction.

I have been predicting this bigger correction since prices stopped falling in 2009, and while prices have had their downs, they have been matched by ups in a picture of pure stagnation.

Currently "Demand remains subdued, but so does supply" is one of the bullet points on the Nationwide index for June, in which it recorded no change in house prices on the month, and a 1% decline on the year.

This follows the 0.3% growth in May, following a 0.2% decline in April, and this is pretty much how it has been trundling along since the second half of 2010. According to the Land Registry index, which is regarded as more accurate prices fell 0.4% on the month in May, and are now down 2.2% compared to last year.

The Land Registry is based on sale prices, so we are officially in decline, but many indices still tell of a balanced market, travelling sharply neither one way nor the other. Still I foretell a big drop in prices. Whether it takes six weeks or six years UK house prices need to fall by a great deal. Houses in the UK are too expensive.

Before the last crash (the crash before the recent crash), the Nationwide affordability index shows that houses cost an average 4 times the average salary when prices began to drop in early 1989 (as displayed in the Nationwide historical house price index), and they fell until that was cut to 2%. Before this crash the average house cost 5.4 times the average salary before prices started to fall at the end of 2007.

The average house currently costs 4.4 times the average salary according to the same Nationwide affordability index. So, even though we are 3 years into this so-called correction, houses are still unaffordable enough to trigger a correction. And that is before you even consider the lack of mortgage availability, and the massive deposits first time buyers are forced to raise, before they can even consider being able to afford a mortgage that they have only a slim chance of getting. No wonder rental demand is soaring.

I blame the government. No, I am not having an Alf Garnett moment, if the government had let the correction proceed unabated instead of throwing money at the problem, then it is at least possible that homes would be affordable to first time buyers again by now and we could hope for a sustained recovery now.

It is not just the UK government either, first time buyers are priced out of the market in Australia as well, but the government is determined to prevent a sharp drop in prices. In America the government stepped in to stave off the crash, and has only served to prolong the agony. The real question is, why are governments so intent on keeping house prices high? Is it something highfalutin like the balance of markets, or is it a conspiracy to keep the poor poor and the rich getting richer? You decide, and answer in the comments.

Mugla Named Top Trending Region in Rightmove Search Report

2011-06-27T11:07:06+00:00

The region of Mugla in Turkey is one of the fastest growing markets in the latest release of the Rightmove Overseas Search report. The data, based on searches during May shows Mugla in 5th place in the top trending category, which is made up of markets receiving over 100 searches per day. The report also shows that searches for Mugla grew 27.02% during the month, which is the 7th biggest growth in the chart.

This, according to UK based agent Spot Blue in a blog post, is not because of people searching directly for property in Mugla, but more likely is because of the increasing popularity of Turkey, combined with the fact that some of its most popular markets are located in Mugla.

The agent names Bodrum, Fethiye, Dalaman and Olu Deniz -- four locations we have mentioned frequently on this site -- as being the top 4 markets in Mugla.

The blog reads:

"Fethiye and Dalaman are two of Turkey's top tourist towns, with a comprehensive offering of activities and things to see, not to mention a wide array of shops, bars and restaurants and of course great beaches and climate. Dalaman also has one of the best serviced international airports in Turkey. According to the Association for British Travel Agents, Dalaman was the number 1 destination for British holiday makers in 2008 (Spain still dominated the top 10).

"The jewel in the crown is Olu Deniz, jewel in the crown because it is near equidistant to both Fethiye and Dalaman, with both just 20 minutes away by car, but also because it has been named the world's most beautiful coastal bay/beach resort in many travel journals and magazines. Olu Deniz is protected by the government and so people will tend to rent and buy property in Fethiye or Dalaman.

"Bodrum offers a very different experience to those mentioned above, but it is still one of the top tourist towns in Turkey. Bodrum is very popular with the club 18-30 and equivalent, but is also a favourite for family holidays as well."

Spot Blue is currently marketing property in Turkey from £25,000.

Cape Verde Property: Sipping Up the Profits

2011-06-18T12:41:11+00:00

Something just hit me. The realisation that Cape Verde has the potential to be a much hotter property market than I had every previously thought, and the facts to support it have been staring me in the face for several weeks.

Several weeks ago we learned that the newly completed Tortuga Beach Resort and Spa development on Sal Island had been opened 100% sold out, with 98.2% of units being sold to British buyers (116 out of 220 units). Most of the British buyers had purchased units as part of their self-invested pension plan.

We were always supposed to put something away for the future, but the security of the guaranteed state pension meant that only the wealthiest and/or most responsible (boring) people would actually do so. With that pension in jeopardy and the prospect of living an impoverished old age, more people than ever before are seeking to put a little aside for their own pensions. Without doubt Self Invested Personal Pensions are now one of the most popular methods of doing this.

SIPPs put the investor in complete control of their pension; they can invest in any and all asset classes, from residential and commercial property to unquoted shares. Most SIPPs investors opt for the more expensive products, which come with advice from expert investors.

This package is why I have underestimated the potential of Cape Verde property. Cape Verde is a tropical paradise within a short-haul flight from the UK. Tourism to the island is growing rapidly, as is the demand for homes to buy and let, but because the islands are small, build space is in increasingly short supply. This is inevitably leading to a huge supply/demand gap in favour of owning property in Cape Verde.

Demand is set to soar, supply will peak as space runs out and then prices and rental yields will enjoy constant growth. This is what the experts are telling SIPPs investors, and this is why those investors snapped up nearly all the units on Tortuga Beach and Spa, which will ultimately become one of Cape Verde's top resorts. Tortuga Beach and Spa will become part of the mainstream holiday accommodation on Cape Verde, managed by leading management firm Sol Melia, which practically secures best-in-breed yields for property owners on the resort.

Those who are now kicking themselves for missing out will be pleased to know that the developer, Resort Group International PLC is currently construction phase 2 in what will become a holiday village. The Dunas Beach Resort swamps Tortuga in terms of size, with over 1200 units, but already most of the units are being sold to SIPPs investors. Phase 3 will be a boutique hotel nested between the two resorts.

The Dunas Beach Resort is currently being marketed by Select Resorts, specialists in Cape Verde property.

In-Deed Online Could Revolutionise Conveyancing in the UK

2011-06-17T14:55:21+00:00

This week, the UK conveyancing industry was rocked by the announcement that Harry Hill, the founder of the UK's largest property website Rightmove has launched a new online conveyancing service onto the Alternative Investment Market today (London's junior stock exchange) with a £2.9 million pre-IPO placement.

A further £1.6 million will be raised by the sale of 3.7m shares at 42p, with partners Hill (ex-chief of Countrywide estate agents before founding Rightmove) and Peter Gordon a former partner at Private Equity group 3i keeping a 10% stake each, and locked into their investment for a set number of years. Former Nationwide chief executive Philip Williamson and former Wall Street trader Boris Zhilin are non-executive directors.

The venture In-Deed Online allows people buying or selling a home to track the legal process from instruction to completion online, and joins AIM today with a market value of £8.6m. Other investors include Octopus Investments and fund manager Henderson, as well as Andrew Black, the co-founder of Betfair. He invested in the pre-IPO round in May at 42p and owns nearly 3% of the company.

With so many big-hitters getting behind this venture, and such financial firepower, In-Deed Online could potentially revolutionise conveyancing in the UK. So, one would expect the conveyancing industry to have one or two things to say about it. Well, while they undoubtedly are saying plenty, it would seem they are less-than-keen to air their comments. I tweeted: "Anyone in conveyancing ind. worried about the new In-Deed venture from Rightmove founder (Countrywide's) Harry Hill? - DM if you'd rather", to which I received only one response.

Fortunately that response came from @SurinderK, a PR who offered me comment from Eddie Goldsmith, Chairman of Conveyancing Association, to which I gratefully accepted and received the following statement from Goldsmith by email:

"News that Harry Hill's conveyancing venture In-Deed [Online] will be listed on the Alternative Investment Market should be welcomed. As an initiative from such a well know industry figure should act like a wake up call to those conveyancing firms that still believe that like the internet is just a passing phase, the conveyancing world is going to stay the same.

"The industry is facing a number of challenges and ahead of the Legal Services Act being implemented in October, I imagine we will continue to see a number of new businesses or approaches to property emerging. Rather than viewing these changes as a threat, existing firms should use this opportunity to improve their own business offering and services."

Two law firms: Breeze and Wyles and O'Neill Patient have already been signed up to carry out the conveyancing work under the In-Deed Online brand, and the firm hopes to sign 2 more. Gordon said In-Deed Online could potentially take stakes in the firms, providing them with capital to support their expansion to allow them to handle more cases.

"As far as customer service is concerned, conveyancing is still in the dark ages," he said. "We're not setting out to be cheap and cheerful - this is a high-quality service at a very fair price." A quick quote reveals the website charges £450 in legal costs, plus £90 VAT and £716 in other costs for a freehold purchase of £250,000.

In-Deed's ambitious goal is to become a market leader in the highly fragmented £1bn conveyancing market within three years. At present, no single firm controls more than 3% of the market. Its service features a price guarantee, a no completion - no fee promise and a team of regional property lawyers who commit to updating homebuyers every two days.

"I'm not very good at being second or third," said Hill. "Together with a team I built Countrywide from a small estate agency group to the largest of its type in the UK, and developed Rightmove which -- valued at upwards of £1bn -- is best in class."

MEP Friends of Turkey Congratulate Turkey on Successful Election

2011-06-17T14:02:29+00:00

The Friends of Turkey, which is a grouping of MEPs actively promoting Turkey within the European Parliament, has congratulated the AK (Justice and Development) Party on winning the election, and also said that the result showed the Turkish people's continued support for economic stability and growth.

"The Turkish people voted for stability and economic growth," said Alojz Peterle chairman of the group in a press statement released on Wednesday.

Peterle continued:

"49.9 percent of the votes for the AKP [AK Party] shows that Turkish citizens give support to the government and their will to follow up the political line of the last eight years, in which Turkey has achieved a great deal. The country's economy has improved and its political role in the region has been strengthened."

Peterle, the former Prime Minister of Slovenia of the Social Democrat party also congratulated the other parties on entering parliament.

Peterle pointed out that a lot of Turkey's democratic reforms have come out of its efforts to join the EU, which have also led to increased trade and cooperation in economic matters and across other areas.

"I hope this new legislative period will bring a new impetus to EU-Turkey relations. The next big step towards Europeanization and Democratization is fostering a civil, modern and individual oriented constitution, which guarantees all fundamental rights and freedoms for every single citizen of Turkey irrespective of her/his ethnic, religious or cultural identity. We as European Parliamentarians will give all necessary support to achieve this goal," Peterle said.

As a Friend of Turkey, Peterle called on all leaders of political parties, civil society organizations and other stakeholders to work together to realize a new constitution.

"Especially in these days where Europe, Turkey and their neighbourhood are witnessing immense changes, it is important how Turkey develops," he said.

According to UK based Turkish property agent Spot Blue there is the possibility that Turkey can indeed get the EU negotiations back on track given the size of the AK Party's majority. The firm wrote on its blog:

"Erdogan wanted 330 seats to give him a super-majority. This would have allowed him to pass constitutional amendments without support from the opposition, amendments promised in the Constitutional Reform Bill passed by a referendum last year. As it is [with 326 seats] Erdogan will need little support, and we should see the amendments come to pass. The reforms are important to Erdogan because they would almost certainly put Turkey back on track towards EU accession, or certainly see negotiations restart."

Spot Blue is currently marketing property in Turkey from £25,000.

Turkish General Election Sunday Looking Like a Foregone Conclusion

2011-06-10T09:42:32+00:00

It is almost that time; on Sunday the Turkish people will vote in the 17th General Election in the country's history, one which holds additional importance because it is the first non-early election in 34 years. Some people say that the question on everybody's lips is whether or not Erdogan will get re-elected, but the consensus of opinion is that an Erdogan/AKP victory is all but a foregone conclusion.

When the Turkish economy crashed in 2001, it was the final straw for a Turkish population angry decades of economic mismanagement and corruption, for which the military's involvement in government was largely to blame. The AK (Freedom and Justice) Party, was elected on the promise that it would end this corruption, phase the military out of government control and end the boom bust cycle.

This will be remembered in history as a turning point for Turkey, because over the last 8 years, the AK party have been delivering on their promises.

Increasing Democracy, Reducing Military Involvement:

Since taking power the Pro-EU AK Party Instituted several democratic reforms such as giving the European Court of Human Rights Supremacy over Turkish courts, which diminished the powers of the 1991 Anti-Terror Law that had constrained Turkey's democratization, and passing a partial amnesty to reduce penalties faced by members of the Kurdish terrorist organization PKK who had surrendered to the government.

The party's reforms of course culminating in the Constitutional Reform Bill which was passed several months ago, giving the AK Party the power to change Turkey's constitution. When completed the reforms will increase freedom and equality in Turkey, and bring the military under the control of the judiciary for the first time in Turkey's history.

Rebuilding the banking system

The AK Party has been particularly excellent in its economic management. When it came into power it took hold of the devastated banking system and rebuilt it from the ground up with a lot more fiscal stability. Making the banks hold higher reserves against lending, installing a central bank office in all private banks, and making the latter present the central bank officer with a report at 5pm each day, and a whole host of other reforms are a major reason why the Turkish banking sector survived the current crisis unscathed.

Reducing Public Debts

Before becoming Prime Minister, Erdogan's last job was mayor of Istanbul. During his time in office he repaid almost all of the metropolitan municipality's 2 billion USD debt.

Since taking office, the AK Party paid down Turkey's public debt from 74% of GDP to 39% of GDP and reduced debt to the IMF from $23.5 billion to $7 billion. This of course allowed them to come out of the IMF support program and stand on their own two feet in 2009. This is particularly significant given that both Ireland and Greece have since been forced to ask for IMF assistance.

Bringing Inflation Under Control:

A few months ago, Erdogan took great pride in announcing that Turkey's inflation had fallen to 6.4% in 2010, a 41 year low. The budget deficit in 2010 is reported to have been just 2%.

Exceptional Growth

On top of all this fiscal stability and restraint, sluggish growth could almost be forgiven. However, Turkish GDP grew 8.9% in 2010, and over 6% growth is forecast for 2011.

Unfortunately, booming domestic consumption has led to the problem of a big and widening trade gap in Turkey. But the AK Party's zero-problem foreign policy is helping to solve the problem. Thanks to the policy, and the government's substantial efforts to increase trade and ties with countries around the globe, Turkish exports are currently growing at around 25% per month.

Falling Unemployment

According to the CIA World Factbook, unemployment stood at 14.1% in 2009. The Organisation for Economic Cooperation and Development said this fell to 11.7% in 2010, and expects it to fall further to 10.6% this year and 10.4% next year.

So Many Positives...

With so many positives and so few negatives it is hard to argue with those that believe Erdogan and the AK Party are all but already elected for the third term in office.

If you disagree, and have arguments that go against this, please feel free to post them in the comments below.

Thanks to Turkey property agent Spot Blue for providing facts, figures and background on the AK Party and Turkish economy.

Buy to Let Booming in England, "Up and Coming" Cities Like Hull

2011-06-02T09:05:25+00:00

I got a press release this morning in my email, and in the summary I read the words "up and coming cities like Hull". The press release was about the prospects for a buy to let boom in the city.

I lived in Hull between 1989 and 1995 and I would have called it down and falling rather than up and coming, we moved to escape the onset of drugs and violence that was seemingly taking over the residential area in which we lived, and all the surrounding residential housing estates that we knew of.

Looking back we now realise it wasn't just Hull, but that all cities were going through the same thing. Some people put it down to the recession and housing crash that started in 1989. Whatever the cause, obviously I couldn't resist scoffing when the press release called Hull an up and coming city, but this changed as I read the release.

It made me remember what a great city Hull really is. I knew this when I lived there and learned about the rich history of the docks, and saw the huge factories of the likes of Smith and Kline. Sure, the residential areas where going through the same problems that cities faced up and down the country, but Hull's docks will always make it a prosperous city, with good job opportunities.

The new investments that afford Hull its new "up and coming" status are two fold: the new £165 million Humber Quays development, which has now gained World Trade Centre status, and is adding new high-quality office space to Hull's waterfront, and the new £80 million turbine factory by Siemens.

To be built on 130 acres of Associated British Ports (ABP) land at Alexandra Dock, the Siemens factory is the largest industrial investment in Hull in decades. The factory could generate up to 10,000 new jobs in the region and will feed into the biggest wind farms the world has ever seen.
Alan Forsyth, Director of well-respected property investment company, Property Secrets and experienced buy-to-let investor, comments:

"It is due to the positive economic track record as well as future growth potential that we believe that Hull is certainly one city to consider as a lucrative buy to let market from a very affordable starting point. Fully refurbished properties can be secured at up to 20% below official RICS valuations with a minimum 7% rental return.

"We have many investors from other parts of the UK attracted by the positive cashflow, and affordable properties here - and are assisting many clients in buying up property portfolios generating passive income on a monthly basis."

Buy to let is reportedly booming across the north and the north east, according to Philip Nolan, owner of the Philip James estate agency.

"Landlords are having a field day in the north of England. In the first quarter of 2011 one of our Manchester branches witnessed two-thirds of its entire rental property stock rise sharply in value without a single property dropping. This is a record for Manchester and we expect the trend to continue throughout 2011 and into 2012," he said.

Istanbul Canal - Mega Project, Potential Disaster, or Campaign Posturing

2011-05-28T09:33:13+00:00

The debate continues over the contentious Istanbul Canal, a mega-engineering-project launched by Prime Minister Erdogan in a move of what increasingly looks like sheer campaign posturing for the June 12 general elections, because the more that emerges on the debate surrounding the proposal, the less it looks like the Prime Minister has really thought it through.

The Bosporus Strait -- the waterway the new canal would replace -- is the only southern sea-access to the Black Sea countries like Romania, Russia, Georgia and Ukraine. The congestion on the Bosporus makes it treacherous. There is also a 3 day wait to get onto the waterway, which causes pollution in the gorgeous Sea of Marmara. Arguably the biggest problem is the potential for environmental disaster from the 9000 oil tankers carrying 145 million tonnes of crude oil through the waterway last year and increasing every year.

The fact that the Bosporus Straight is not ideal is in no debate, but with the new canal proposal Erdogan seems to have jumped in feet first without really thinking about the possible downsides, which has obviously brought opposition to the plan.

For a start there is the massive $20 billion cost. Political critics say that instead of making future generations pay for such a huge project, the money should be invested in things like development of renewable and sustainable energy.

And then, speaking of energy you have the Nabucco pipeline project which has been in the works for several years, and would link Europe to the Caspian oil fields via Turkey and -- importantly -- bypassing Russia. According to critics the two plans are in direct conflict with one another. They go so far as to say that if the canal goes ahead there will be no need for the Nabucco pipeline.

"Turkey always argues that pipelines like Nabucco are to relieve pressure on the Bosphorus. With the canal, that argument could become redundant," said Has University's Associate Professor of International Relations, an energy policy expert. "And with improving and cheaper Liquefied Natural Gas technology transportation by tanker is becoming increasingly more competitive than pipelines."

Russian politicians are also a little bit miffed about the project it would seem; not least because they apparently heard nothing of the plan before the world did.

"The first thing we knew about this was when the Turkish prime minister made his announcement. We knew nothing about it," said Igor Mityakov, a spokesperson for the Russian Embassy to Turkey. "There are still a lot of questions and the interests of the Black Sea nations must be taken into consideration."

"How will the new canal be profitable when there is free passage through the Bosphorus?" Mityakov continued. "This is a question a lot of people are asking."

The Russians have concerns over waterways to the Black Sea for obvious reasons. The Bosporus comes under the 1936 Montreux convention, which guaranteed use of the strait for cargo ships in times of peace, ending centuries of conflict over it. The convention also limits the passage of warships through the Bosporus, Russia hopes the new Canal will also adhere to these principles.

According to Julian Walker, director of Spot Blue, an agency currently marketing property in Turkey from £25k, there is every reason to suspect that the canal will not go any further than an idea.

"Throughout history the idea for such a waterway has been considered by rulers seven times since the 1500s, each time it has been scrapped. When you add to this the fact that the idea was announced during an election campaign, announced along with a plan to split Istanbul into 2 cities, and the fact that Erdogan appears to have given little consideration to the canal's effect on things like the Nabucco, and it looks like little more than a campaign stunt," said Walker.

This is backed up by the fact that, without an environmental study, Erdogan is unable to answer environmentalist claims that such a waterway could endanger rivers in the Black Sea like the Danube, due to the different salt levels in the two seas. If Erdogan was serious about the waterway you would have thought he would have carried out such a study before making the announcement, to check if it could even go ahead.

We will all find out soon enough whether or not the canal is an idea with weight behind it or simply something to stir up Turkey's voting public.

Housing Market Cheer or False Hope at Rising Prices and Loans

2011-05-01T23:02:01+00:00

I finally got round to reading an Express article I bookmarked at the end of last week titled HOUSING MARKET CHEER WITH RISING PRICES AND LOANS. The article is positively brimming about the double whammy of good news for homeowners as house prices and mortgage approvals were both seen rising in March.

According to the figures covered the statements are true, but when you look a little deeper you realise that anyone given hope by the news will only be getting false hope.

Firstly the 0.7% house price rise comes from Find a Property, which found prices up 0.3 per cent in January. As much as I would like to pour water on this, because Find A Property's index is based on asking prices only, I can't, because the data is very similar to that of the Nationwide index on a monthly basis.

What everyone who has bothered to pay attention knows is that price rises when homes are unaffordable to the majority of people are only ever going to be temporary, because they are pushing us closer and closer to a correction. In the current case this is even more true, because the wider economic picture does not seem capable of supporting house price rises.

Unemployment is still too high, VAT is higher than ever, the government's austerity measures will continue to bite, wages are frozen and the economy is still struggling to find growth. That is before we mention the lack of mortgages.

But mortgage approvals are rising? Well, they are and they aren't. Mortgage approvals for house purchase increased "slightly" on a month-by-month basis, according to the British Bankers Association report, which the Express quotes. However, according to the same report mortgage approvals for house purchase dropped 10% compared to last March.

The figures show that 31,660 mortgages were approved for house purchases in March. This is not only less than the 50,000 per month that a leading think tank's research found was needed to stop the market from falling, but way less than the 70-100k+ plus being approved each month in a healthy market.

I don't know about you but I am not breaking out the champagne to toast the recovery just yet.

A Realisation on the State of the US Housing Market

2011-04-28T08:12:39+00:00

I have been so caught up in talking about double dips and slow recoveries to fully comprehend the depths of the US economic crisis. The US economy is on its knees, up to its neck in the creek, with the housing market like a weight around its neck. What made me come to this realisation? Three headlines in my reader, all of them from RealEstateEconomyWatch.com. What the heck, I'll paste them below as I saw them so you understand my frame of mind:

A look at what's new

RealEstateEconomyWatch.com (19)

Congress Doubles Funding for Troubled USDA Housing Loans While slashing funds for disability, elderly, homelessness and Native American housing programs, Congress has doubled the funding for a USDA housing program that may cost the government $4 billion in defaulting loans because over a third of the ...

Nearly Half of Sales Now Distressed Properties Sales of distressed properties rose to 48.6 percent in March - the second highest level seen in the past 12 months, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The monthly survey of more than 3,000 real estate ...

Prices Turn Back the Clock to 2004 House prices fell 1.6 percent in January, retreating to levels of seven years ago, before the housing boom began. The Federal Housing Finance Agency's House Price Index is February prices are 18.6 percent below its April 2007 peak and down 5.7 ...

I have unreaderised the links so you can read the articles, but as Reader users will know, A Look At What's New is on the homepage of Reader. Those snippets there were the first thing I saw when I opened Reader leading me to my shocking realisation.

In those three links alone we can see that the housing market is still falling apart, and that the government's frantic attempts to stop any more millions of people losing their homes every month, are pulling the rest of the economy apart.

When you read into the reports it becomes even more worrying. The government has doubled funding for the USDA Rural Development Service's Section 502 single family guaranteed loan program, despite the fact that an audit on 100 of the loans already given selected a random found 28 borrowers had obtained loans they weren't eligible for under the program. This is the funding it is cutting aid to the disabled for.

Of the 28 there were those who had gotten the loans that didn't need them, those who had gotten loans and couldn't afford them, those who had gotten loans and couldn't afford them, and those who had gotten loans despite being delinquent on a loan or having just defaulted on a loan, not to mention those who got loans for houses with pools. The auditors believe tens of thousands of the loans were wrongly given, and predict a potential flood of defaults.

This is typical of the US response to the crisis so far; throw money at the problem and end up making it worse. They are doubling USDA funding when they haven't even learned the lessons of their mistake, which means they will likely pour twice the defaults back onto the market down the line. Lest we forget the second headline, already almost half of all home sales are distressed sales.

Thank fully there is some light at the end of the tunnel. The consensus of opinion now supports the fact that the US economy is in recovery, but most agree that it will be a long hard slog back to anything like solid growth. Some believe the US economy will never be the same again. Having said that, this recession has been harder hitting than the great depression, especially on house prices, and we all know how well America came back from that.

UK House Prices: Not a Lot of Room for Hope

2011-04-20T20:42:24+00:00

The number of home buyers shot up in March according to the National Association of Estate Agents, who put the jump down to people trying to beat the Easter rush. Figures released by the body show that 290 potential buyers registered with estate agents in March, up from 268 in February.

However, in the same breath the Council for Mortgage Lenders has blown that house down with a report of yet another year on year drop in mortgage approvals. Mortgage approvals fell 2% year on year in March according to the CML. Optimists will cling to the 21% month on month rise, but this is simply a seasonal trend. Compared to the fourth quarter of 2010, the first quarter's 30.1 billion worth of mortgages represents an 11% decline on the quarter.

Nonetheless the CML spokesperson still managed to be "pretty" upbeat. CML chief economist Bob Pannell said: "The housing market has emerged hesitantly from hibernation. Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011. Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity, albeit at pretty low levels."

Pretty low? In the same article the Guardian quoted Jonathan Samuels, chief executive of Dragonfly Property Finance, who gave a very contrite viewpoint on the market:

"Consumers are worried about their jobs and the direction of interest rates, which will affect their already stretched finances, and so are putting the biggest financial commitment of their lives on hold. High street lenders, meanwhile, are still in hiding and are only opening their arms to flawless, equity-rich applicants. Unfortunately, two negatives in the mortgage world do not make a positive."

In short: hardly anyone feels confident enough about their jobs, house prices, interest rates or the economy to want to buy, and only a fraction of the few that do can raise a deposit, and only a fraction of those will get a mortgage. You don't have to be a clairvoyant to see a lot more house price misery in the near future.

Buy Me a Property in Izmir

2011-04-09T14:39:05+00:00

I have made no secret of the fact that Turkey is currently one of my top choices for overseas property investment, but as I have said many times; you can't buy a property in Turkey without choosing a region, a town and a street. I am putting my money where my mouth is now to say that is I was going to buy a property in Turkey right now, I would buy in Izmir.

You hear so much about Istanbul property right now. The Brookings Institute named it the fastest growing city in the world in 2010, its population is the fastest growing in Turkey, which in turn is the fastest growing in Europe, and the combination of high liquidity and a population growing rapidly in number and in affluence is causing demand to far outweigh supply.

Izmir shares the same set of dynamics, in fact it has the second fastest growing population in Turkey, yet property is cheaper than in Istanbul, and there is still a chance to be the early bird in Izmir. The window is closing though, according to Julian Walker, of Turkey property specialists Spot Blue.

"Whereas Turkey has always been a holiday home buyers' destination, as Turkey continues to power out of recession leaving the darling's of Europe in its wake residential property investment is rapidly growing. Istanbul is certainly the number one choice, but it will only be so long before growth peaks and better opportunities are elsewhere, the wise investors will be branching out into the other main cities such as Izmir and Antalya now, before the hordes follow," he said.

Izmir has been in the news in the past week, because Pegasus Airlines have launched a new direct flight to the city from London Stansted.

Spot Blue is currently marketing property in Turkey from £25,000.

FSA Backs Down on Mortgage Regulations, Rightfully So

2011-03-25T22:45:08+00:00

At last some good news for the housing market. Today the financial services authority scrapped its more outlandish, and according to some even draconian measures as cooler heads seemingly prevailed.

Revealing its business plan for 2011 and 2012 the FSA asking lenders to ensure borrowers can repay loans over 25 years "may not be appropriate". Nor do they now intend to ban interest-only loans.

The news will be a feather in housing minister Shapps cap, Shapps reverse-lobbied the FSA earlier in the year, applying pressure that the proposals were a step too far. He did however stop short of calling the proposals draconian, something which cannot be said for the Chartered Institute of Surveyors.

This is good news for the housing market though, albeit only a tiny bit. Let's face it; the mortgage market is pretty well self regulating now. After the kicking it suffered for its outlandish behaviour, the banks have learned their lessen and lending is tighter than it has been for a decade. They are even lending less to families than couples. The last thing it needs is such harsh regulations. This makes the FSA's current behaviour slightly laughable.

Where were these stringent regulations when banks were doling out 110% and 120% loans so every Tom Dick and Harry could buy an overvalued property in an area they couldn't afford to live? Nowhere, yet here they are trying to overcompensate for their failures by shutting the door to an empty stable. Time will tell where they are the next time the mortgage market really needs the bad medicine of stiff regulation.

Government's First Buy Scheme a Drop in the Ocean of FTB Misery

2011-03-23T23:59:56+00:00

For those of you that don't know, today was Budget Announcement Day in the UK, the day when the Chancellor of the Exchequer dances for us all, well, at the moment it is more like a walk along the tight rope.

Of particular importance for the housing market -- or so it appears -- is the first home scheme, replacing the Home Buy Scheme as the latest saviour for beleaguered first time buyers, that is the 1% of first time buyers that will actually benefit from the scheme.

The government has stumped up £250 million to fund a shared equity home buying program, whereby first time buyers earning £66k or more can buy a home with a 5% deposit, and a mortgage provided 50/50 by the government and home builders.

The government assures that the money is new money, not reallocated, and the scheme seems good on the face of it, but it is Campbell Robb, chief executive of Shelter who bursts the bubble.

"This first time buyers' package is the policy equivalent of a sticking plaster on a broken leg, and will have little impact on our housing crisis," said Robb.

"In fact today's announcement will help less than one per cent of those struggling to get on the housing ladder, leaving them more likely to win a prize on the lottery than be helped through this small-scale scheme."

Apart from that there was a common response: one small step for Osborne, one small step in the right direction for the UK housing market, with the emphasis on small. The industry still thinks the government can and must do more.

Sarah Webb, chief executive of the Chartered Institute of Housing, said: "The £250 million fund is a useful short term boost, but it is important that we also address the fundamental question of how to sustain housing supply in the long term.

"Measures to reform the planning system will have a more significant role in this."

Echoing Webb, David Cowans, chief executive of Places for People said:

"We are facing the severest housing shortage since the 1920s, so the government's new firstbuy initiative is a welcome step in the right direction, but will only go some way to helping house the nation.

"To make more homes more easily accessible we have argued that house builders need to look at greater tenure flexibility and offer a wider range of products and price points which people can move along, as their financial circumstances and personal aspirations change."

Meanwhile Ian Fletcher, director of policy at the British Property Federation says the government should be more conscious of making sure funding like this is also helping to bring growth and jobs into the economy.

"We would like to have a seen a refined policy which targets such aid at homes yet to built or completed, rather than a means of house builders selling unsold stock," he said.

UK Housing Industry Struggles to Get First Time Buyers Back in Market

2011-03-12T09:45:58+00:00

Among the property press releases I am receiving on the UK market there is a very common trend forming; developers are trying to lure first time buyers into the market. This is far from surprising, first time buyers are considered vital for a healthy housing market; they made up over 60% of all sales before the crash, now they make up less than 8%.

For the most part first time buyers can't afford properties in their area, if they can they can't raise a 5-10% deposit, and even if they can do that they can't get a mortgage. There are real fears that we will become a nation of renters, if something can't be done to help get the current generation's first time buyers onto the property ladder.

"First Time Buyer Properties Now Available At Merryfields

LEADING housebuilder Barratt West Midlands has announced the release of a brand new selection of two-bedroom homes at Merryfields - the five star housebuilder's popular Brierley Hill development - as the developer continues to meet the needs of the area's first time buyers," Reads one of the press releases.

"Dedicated First Time Buyer Event This Weekend At Bracken Gardens

BUYING a first home can seem like an expensive time, but this weekend Barratt West Midlands is inviting potential purchasers to its Bracken Gardens development on Armitage Road, Rugeley, where visitors could find out just how affordable it could be to buy a new home," reads another.

In the case of the latter, we have been hearing about dozens of similar events being held every weekend as every attempt is made to drag the market's lifeblood back, kicking and screaming in some cases.

On March 1st, both Barrat and its David Wilson Homes subsidiary issued a press release about the help they were offering first time buyers. West Midlands First time buyers could buy properties for just a 5% deposit, with the developer adding a further 15% in the form of a no interest deferred loan. However, the truth of the matter is, those that can raise a 5% deposit, will tend to be those well enough off to put down a larger deposit anyway, either on their own or with assistance from family.

At the moment, with unemployment high, job security low, banks tight and deposits of around £10k needed to even consider a mortgage on properties over 5 times the average salary, renting is not only the best option for many at the moment, but the only option.

No Bull, No Bounce, Just Falling UK House Prices

2011-03-08T22:41:32+00:00

I just read an article on UK house prices in the Financial Times and it blew my mind. Before you get excited, the reason it blew my mind is the fact that it was completely un-mind-blowing. There was absolutely nothing in the article that hasn't been said a hundred times before.

Basically it said UK house prices are heading for a fall because interest rates are almost certainly on the horizon, and because the austerity measures will raise unemployment. It misses out the lack of affordability and constrained mortgage market.

"House prices have already fallen for each of the last six months -- before either the austerity measures or higher interest rates have kicked in. Further sharp falls look inevitable when they do," concludes the article.

Countering this, the Royal Institute of Chartered Surveyors points out that while house prices maybe falling, that they have been falling slower and slower for the last 4 months. And Acadametrics -- who it has to be said present balanced information for the most part -- point out that house prices are currently just 5% below the peak.

When you look back through 2009, when prices were rising, the bears continually repeated the same spiel, mortgage market constrained, wages frozen, unemployment high and likely to rise, austerity cutting demand and raising supply, all of which should have brought prices crashing down in a second dip.

Meanwhile the bulls and the fence sitters continually said that low interest rates would continue to support the market. But now, that defence is starting to come to crumble. The markets are expecting a 75 basis points rise. This would add 8% to mortgage repayments, making the average monthly payment £722. This will not help the housing market one bit. In fact we will likely be looking at a resurgence of underwater loans, arrears and repossessions.

We could see a fire sale as people try to get out of mortgages they can no longer afford, and this will certainly become part of the pile of reasons for house prices to fall. Of course house prices are already falling, as we said, house prices have fallen for the last 6 months straight. And not just at a moderate rate, in fact in 2 of those 6 months we have seen record falls.

According to Halifax house prices fell 2.8% in the year to end this February, the biggest year on year fall since October 2009, and just 5 months after the record 3.6% month on month fall recorded by Halifax in September last year. So, house prices are heading down, and there is little reason to suggest them heading back up anytime soon.

IATA Reports Strong Rebound in International Air Travel in January

2011-03-05T22:43:39+00:00

Global passenger flights grew by 8.2% in the year to end January 2011 according to the international Air Transport (IATA). The month-on-month growth in January was 3% according to the figures.

By January 2011, air travel volumes were 18% higher compared to the low point reached in early 2009 and some 6% above the pre-recession peak of early 2008.

"So... we begin the year with some good news," IATA director general Giovanni Bisignani told OPP this week.

"With most major indices pointing to strengthening world trade and economic growth, this is positive for the industry's prospects. But we are all watching closely as events unfold in the Middle East. The region's instability has sent oil prices skyrocketing."

"For each dollar it increases, the industry is challenged to recover $1.6 billion in additional costs. With $598 billion in revenues, $9.1 billion in profits and a profit margin of just 1.5%, even with good news on traffic 2011 is starting out as a very challenging year for airlines."

The other findings in the IATA report were as follows:

The 8.2% annual growth represents a turnaround; growth slowed to 5.4% in December.
In January, capacity grew 9.1% year on year, outstripping demand growth and resulting in an average load factor of 75.7%. Adjusting for seasonality this is equates to a 77.7% load factor, which is a 1.1 percentage point drop from the October 2010 peak.
On a regional basis, of the continental segments providing both demand and capacity figures, all showed capacity growth outstripping supply. Europe saw a 7.9% growth in demand tempered by an 8.8% growth in capacity. In North America the figures were 8.7% and 10% respectively, and in Latin America the figures were 11% and 12.4% respectively.

What can we take from this? Ultimately it leaves a massive amount to interpretation and opinion, but one possibility is that the airlines overestimated the strength of recovery. On the flip side they may prove to be right on the money if demand continues to grow while supply tapers.

Of course capacity growth will tend to be good news for the overseas property market, because it means new flights, new routes and increased accessibility.

Antalya Now 4th Hottest Tourism Destination in World

2011-02-26T14:22:01+00:00

Antalya has been named the 4th most visited place in the world, after Paris, London and Singapore. In 2008 a similar report from the Association of British Travel Agents named Dalaman as the top Turkish destination with British travellers.

Antalya is the quintessential Turkish holiday spot: 300 days of sunshine per year, a well served international airport, a bustling and increasingly metropolitan city, great variety of shops and restaurants and fantastic beaches with turquoise waters.

Each year more and more Brits ditch their traditional holiday haunts and give Turkey ago. According to ABTA this amounts to about 20-25% growth per year.

According to Levent Demirel, who broke the news at a tourism summit in Belek, has been growing at around 3% per year. He also Demirel revealed the next target for Turkish tourism; to welcome 50 million visitors, and earn $50 million in tourism revenues by 2023.

According to Julian Walker, director of Spot Blue the target is well within the bounds of reality, especially as the accessibility to Turkey continues to grow.

"This year we are expecting the airport at Gazipasa to open, giving a boost to tourism into Alanya, we also have millions of liras being spent on increasing the capacity of Izmir ports, and a third airport has just been approved for Istanbul. Accessibility is increasing because demand is increasing, if growth continues at its current rate then that target is easily achievable," he said.

Spot Blue is currently marketing property in Turkey from as little as GBP25,000.

Spanish Property Continues to Regain Popularity in January

2011-02-23T16:33:32+00:00

The number of searches for Spanish property in January this year was 37.05% higher than last year according to overseas property portal Homesgofast.

According to the portal the trend that has been noted since the Spanish property market imploded; namely the dominance of the Balearics and Canary Islands, not only continued in January but became even more pronounced. One third of all enquiries into Spanish properties were for those islands according to the portal.

"It's interesting to see how Spain despite the bad press is still very attractive to overseas buyers considering retiring or buying a second home abroad," said Nick Marr, director of the portal.

"The change towards the Canary and Balearic Islands may be a result of the bad press that the Spanish property market has received," he continued. "People looking to get away from the UK winters still see Spain as a great place to holiday. The Canary Islands offer winter sun and a housing market that has not received the negative press that mainland Spain has endured."

"House values in Spain are at an all time low and the increase searches may be a result of both buyers and sellers researching the market."

Nick is right about the British aspect. According to the Association of British Travel Agents, Spain is still the number one holiday destination for Brits, with over 11 million British visitors gracing the shores every year.

This combined with the fact that Brits bought more overseas property per head of population than any other nationality during the boom and you can easily see why the Spanish property market's boom was one of the biggest in the world.

According to many overseas agents, Brits are now being outnumbered by Eastern Europeans, and this is likely at least a part of the reason why the Spanish islands are more popular, because they have traditionally been favoured by Eastern European buyers, according to real estate agents.

This is simply the latest in a succession of reports that Spanish property is regaining popularity with overseas property buyers -- starting from as early as the first quarter of last year. During the last 12-18 months almost all of the UK's top property portals have revealed growth in the popularity of Spanish property, with many of them featuring the country in first or second place on one or more occasions.

The aforementioned ABTA data was in an interview aimed at promoting Turkey, and the fact that British tourism to Turkey is growing at about 20% per year for the last few years, while Spain is stagnating.

However, stagnating is not falling, and with Turkey currently receiving 2 million British visitors per year (German is dominant market), it will be some time before Spain is knocked off the top spot. With Spanish property prices at between 20 and 40 percent below boom levels, and now thought to have bottomed, one must expect its popularity with foreign buyers (especially Brits) to see continued growth this year.

More and More First Time Buyers Becoming Long Term Renters

2011-02-15T23:40:35+00:00

A recent survey by leading UK property website has shown that first time buyers are now responsible for less than a quarter of UK home buyers, at 22%.

Miles Shipside, director of Rightmove, said: 'The level of first-time buyers dropping below one-in-four of all prospective buyers is a big concern for the property market.

'The desirable level of first-time buyers for a healthy market is typically around 40 per cent of all buyers, almost double the current level, as they perform a vital function in completing chains and aiding fluidity throughout the housing ladder.

'These findings are likely to heighten government concerns about the scarcity of first-time buyers and it is imperative for the long-term health of the market that a solution to this issue is found.'

This is true, in fact the government has just held a meeting with some of the biggest hitters in property to try and come up with a solution to the problem.

But, Matt Griffith, of the campaign group Priced Out told the government, -- the same-old solutions that are brought out and waved around at times like this --, shared ownership schemes or encouraging banks to make risky loans would not be solutions.

He said: 'The fundamental problem is that house prices remain too high.

'Encouraging first-time buyers to take out large loans now is taking advantage of young people's vulnerable financial state for a short-term political boost.'

The home builders are certainly trying to do their bit. This week the press releases I have been sent have contained details of several first time buyers events at various new developments up and down the country.

They too will need some creative solutions if they are to bring some signatures from cash-strapped first time buyers.

House prices were over-valued when the crunch hit. But ironically they are even more over valued now with the Halifax index putting the average house price at over 5 times the average salary, a sight more than the long-term average of 4 times, which is arguably still much too high.

First time buyers need to find a 5% deposit, at current prices that is £8,000. With unemployment running high, austerity hitting low, pay-freezes, possible rate rises on the horizon, and lending criteria tightening still, it is easy to see why more and more first time buyers are becoming long-term renters.

Turkey Property Earning Reputation as Top of the Props

2011-01-30T09:58:31+00:00

Turkey's reputation as one of the top overseas property hotspots of the next 5 years continues to grow. This is hardly surprising; right now, Turkey is one of the hottest emerging/fastest growing economies in the world, and is also one of the most stable and robust.

During 2010 the economy grew 6.7%, while inflation fell to a 41 year low of 6.4%, and the budget deficit fell to just 2%. Because of strong growth and falling inflation Turkey has continually lowered interest rates, even now as other countries -- including emerging markets like Poland -- are putting their rates back up, Turkey brought another 20 basis points off the rate.

As it has always been there are two different sides to buying property in Turkey, the holiday home side, the investment side and those who want to enjoy holidays in a property that brings in rental income when not in use.

Holiday home buyers will buy in wherever they have most enjoyed their holidays, or wherever they can afford to buy a suitable property in a holiday resort area. This type of buyer tends to favour property in Alanya, Antalya, and places like Altinkum depending on budget, with Belek being a favourite with golfers and the more mature buyer favouring Kas and Kalkan.

Investors right now are tending to favour Istanbul, where the massive population, growing in affluence and numbers combined with growing mortgage lending and undervalued property to create massive growth potential.

However, according to Julian Walker, director of Spot Blue, Ankara and Izmir are also generating more attention from investors, he said:

"These are two cities offering much the same dynamic as Istanbul, large populations growing rapidly in affluence and numbers, both through natural growth and through migration from rural areas. Also, they offer the same supply/demand dynamic, namely demand growing faster than supply and as such they offer good investment opportunities."

Spot Blue is currently marketing Turkey property for sale from £25k.

Turkish Central Bank Lowers Rates Against Economists Prediction

2011-01-22T11:22:54+00:00

The Turkish Central Bank surprised the financial world this week when it lowered the policy interest rate by 25 basis points to the record low of 6.25%. The move went against the consensus of economists surveyed by Bloomberg, who overwhelmingly predicted that the rate would remain unchanged.

Turkey is hoping that reducing interest rates will close the widening current account deficit, but recent comments by central bank governor Durmus Yilmaz indicated that their focus has shifted to the potential for runaway credit impacting on their control over inflation. Apparently, the committee that has the final say knows something we and the Bloomberg economists do not about just how high the potential for runaway credit is, or at least they apparently think they do.

The low interest rate could spur foreign buyers into action according to Julian Walker director of Spot Blue, he said:

"[The reduced rate] is making mortgages on Turkish property even cheaper, and at a time when the Lira has weakened slightly after a sustained period of strength. Turkish property is currently among the most popular in the world, and it is almost certain that many people will jump right in to capitalise on the record low rate.

"Of course, mortgages in Turkey aren't the easiest in the world to come by, but having said that they are no more difficult than they were during the boom. If you have been advised that you are good for a mortgage on the purchase you plan to make, then now is almost certainly the time to go ahead."

Spot Blue is currently marketing property in Turkey from 25,000 GBP

Turkey Press Into 2011 With Strong Growth and Stability

2011-01-07T16:23:43+00:00

According to Turkish Prime Minister Recep Tayyip Erdogan, Turkish GDP grew 6.4% in 2010 as a whole. Despite the fact that this is a slowdown on the exciting growth of the first and second quarters, which saw GDP grow 11.4% and 10.3% year on year respectively, it is still one of the fastest annual growth rates in the world.

Arguably even more significant, according to the Brookings Institute Istanbul was the world's fastest growing city in 2010, with year on year GDP per capita growth of 5.5% for the year, and an astonishing 7.3% growth in employment. This is significant because it beat the great cities in China, India, Indonesia, Brazil and all the world's other hot emerging markets.

However, according to Turkey property specialist Spot Blue even the growth of Istanbul was not the most significant segment of Turkey's development in 2010. Prime Minister Erdogan also revealed that inflation fell to 6.4% in 2010, a 41 year low. This, says Spot Blue is the most significant statistic.

"It is most likely that history will reflect on the inflation as the most important achievement in Turkey's economic development," the firm wrote on its company blog.

"Having dragged down inflation and public debt, the Turkish government had bags of leeway to bring down interest rates in response to the recession, and without fear of destabilising the economy. Because of this and with inflation still higher than most developed markets, there is much less risk that rates will be raised quickly, in fact the Central Bank recently brought down rates even further," it went on.

This stability left from years of paying down public debt not only made the rapid growth of 2010 possible, but fuels a strong future according to the firm.

Spot Blue is currently marketing property in Turkey from as £25,000.

A Look at What 2011 Has in Store for UK House Prices

2011-01-06T21:45:10+00:00

Sorry it has taken me this long to get pen to paper on the 0.4% rise in UK house prices recorded by Nationwide to end the year. This left prices up 0.7%, proving right the common prediction that prices would end 2010 much as they started it; that as much as weak demand would apply downward pressure, supply constraints would redress the balance.

That said, another way of looking at the balance is prices rose in the first half of the year and fell in the second, barring regional differentials. The 0.4% month on month rise aside, in the quarterly measure -- which is regarded as more accurate -- prices continued their steep decline; falling 1.3% in the final quarter.

With VAT now at 20%, a slue of other cut backs either in effect or about to come into effect, public sector jobs still to go, and the ever-present fear that rates will need to start heading back up soon as well, those predicting that 2011 will be another largely flat year for UK house prices could well find themselves in for a shock.

The prediction is the same as it always is during down-jaunts, that the constrained supply of this tiny-island we live on will keep the falls from being too drastic. But prices have fallen throughout the second half of 2010 because the incoming coalition government abolished HIPs leading to an increase in supply. Millions of public sector workers getting paid off all at the same time looks bound to tip the balance further and bring more falls.

I agree that the falls are unlikely to be as harsh as in 2008. At the time we saw an unbelievably drastic reduction in confidence, at the same time as the mortgage tap went from a strong flow to a trickle, and millions of investors started trying to get out before the fall. That said I really don't see how the market can survive the weight of downward pressure that it has coming. London will likely be resilient, as well the south, but I am practically sure that the falls in the rest of the country will be sufficient enough for a 5 - 10% fall overall.

Some Predictions on the Turkish Property Market in 2011

2010-12-31T16:02:56+00:00

It's that time of the year again, where we put the year gone by behind us and start to look forward into the year ahead. Turkey is one of the most talked about countries, with many publications (including this one) rating as a top hotspot of 2011. So I thought it would be poignant to end the year with some predictions from one of the industry's best known sources, Spot Blue director Julian Walker.

According to Walker high profile international golf tournaments will greatly increase the profile of Belek in 2011.

Alanya is also one to watch this year because "2011 could finally be the year of Gazipasa" in reference to the small airport just outside Alanya that is currently having its runways expanded to accept international traffic.

Altinkum will continue to offer unrivalled value for money in 2011 according to Walker. "But", cautioned Walker, "as always buyers can only ensure they are getting good value for money by conducting all checks and due diligence."

Spot Blue is currently marketing property in Turkey from as little as £25,000.

Turkey from 6th Place to Hottest Investment in 1 Year

2010-12-24T13:12:29+00:00

As our regular readers will know, we have just put Turkey in the number one spot on our predictions for the hottest property investment destinations in 2011. To many people this comes as no surprise given the massive buzz about Turkey at the moment as -- now the fastest growing economy in Europe --, it continues to power out of recession.

However just last year Turkey was in no way a contender for the top spot, in fact it was in 6th place in our top 10 investment hotspots in 2010 article.

This is because at the time Turkey was a strong holiday home destination, offering 6% rental yields from over 28 million tourists per year, but that was by far its main market, with pure investors opting for places like Montenegro and Albania, which had better chances of achieving EU membership.

The situation couldn't really have changed more than it has, as we said in the 2011 report:

"With the EU crumbling and membership looking more like a curse than a charm, we can look at Turkey with fresh eyes."

With these fresh eyes we can see that Turkey is not only the fastest growing economy in Europe, but with a 2% budget deficit, low and falling public debt and a strong and stable banking system, that it is also currently one of the most stable countries and therefore one of the safest investment destinations as well.

Now Turkey is attracting pure investors as well as holiday home buyers, and this is causing sales and prices to grow rapidly.

In response to Turkey's first place in the top investments chart, Julian Walker, director of Spot Blue said:

Julian Walker, director of Spot Blue said:

"While we can't really say whether Turkey will be the hottest in the world in 2011, as our focus is purely on Turkey. But what we can say is that there is no market in Europe capable of matching Turkey in its economic growth, and this will certainly continue to bring in investors.

"As we have seen Turkish property regaining its appeal with British and foreign investors throughout 2010, as well as a massive recovery in the holiday homes market, we can't see this upward surge dying down as the international recovery strengthens in 2011."

The firm is currently marketing property for sale in Turkey from £25k.

Colordarcy Announces Hottest Investment Destinations for 2011

2010-12-23T15:45:25+00:00

Overseas property specialists Colordarcy has announced its picks for the hottest overseas property investment destinations in 2011. It could be said that they have opted for a couple of surprises. The London-based firm has compiled a detailed PDF report, which can be downloaded for free here. Loxley McKenzie director of the firm said:

"Well, here we are again as another year draws to a close, and the world of overseas property prepares to move another year away from the dreadful crash. A crash, which has changed the world, with emerging markets now expected to lead the global recovery and established markets struggling to grow at all -- of course there are some exceptions to this. This is heavily reflected in our investment picks for 2010, which contains only 1 established market, breaking up the 4 emerging markets."

The firm has named Brazil as the number one investment destination in the world, though according to McKenzie it was a "toss up" to choose between Brazil and Turkey, which came a close second. McKenzie explained:

"Both have been completely stabilised and reformed for the better by two terms of excellent governance, both now have stable and rapidly growing economies, and both are seeing growing affluence in the population cause demand for housing to outstrip supply by a large and increasing amount."

According to McKenzie the discovery of oil in Brazil and its winning the World Cup in 2014 and the Olympics in 2016 clinched it for the Latin American market.

The USA was in third, which comes as no surprise according to McKenzie.

The report highlights the massive problem of repossession in the US, with Florida being highlighted as a hotbed for investment because of its having one of the country's highest foreclosure rates. Because of this, there are "opportunities to buy, not distressed or repossessed properties, but discounted new build properties on the open market at up to 60% below replacement costs," said the report.

Egypt was named the fourth hottest investment destination for 2011, according to the report: "Egypt fits the model of your typical emerging market investment."

"The formula is simple; low prices and high growth," said McKenzie. "On a comparative basis prices in Hurghada and Sharm el-Sheikh property prices are some of the lowest in the world," he added.

5th place went to Vietnam; the report said: "Data shows that Vietnam GDP grew 6.3% in 2008, 5.3% in 2009 and is on track for similar growth this year. The Asia Development Bank is forecasting 4.5% growth this year, the IMF is predicting 6.5% growth this year and 6.8% next year."

According to the report, this growth, the fact that it looks sustainable, and that Vietnam property is still priced comparatively low compared to its peers, is the reason why Vietnam will hot up in 2011.

Top 10 Property Investment Destinations in 2011

2010-12-18T09:35:15+00:00

We wouldn't be a respectable property publication without giving our views on what the top property investment destinations will be in the coming year.

It is now 4 years since the UK caught the financial contagion spreading outwards from America, which had been the initial carrier of the virus 1 year earlier. 4 years is a long time, but the UK is still struggling to find a way back to growth, and the US is only slightly better, both housing markets are currently looking very rocky indeed.

But the problem is not limited to the "special partnership", more it is a problem for developed markets which over indulged in the sub-prime mortgage boom, and/or overleveraged based on their exceptional growth levels and are now struggling to pay back the money without the cushion of growth.

It is now up to the emerging markets to pull the world back onto its feet. Whoever would have thought that we would see a world where markets like Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa (CIVETS) would be among the greatest hopes for the global economy?

But where are the best places to invest in residential and holiday property in this new world?

1: Turkey

I actually can't believe that I am putting Turkey in number 1, but there is absolutely no choice. Turkey has rocketed out of recession and is now the fastest growing economy in Europe. With the EU crumbling and membership looking more like a curse than a charm, we can look at Turkey with fresh eyes.

To see that 8 years of reform under the AK party of Recep Tayyip Erdogan have turned Turkey into one of the most stable countries in the world. The budget deficit was 4% in 2009, and is currently thought to be running at 2%. Reforms to the banking system after the 2001 crisis, combined with the immature mortgage market left Turkish banks unaffected by the crisis.

At the same time low inflation and years of paying down debts gave the Central Bank plenty of room to bring down interest rates without fear of destabilising the economy, in fact interest rate drops were not a knee jerk response to the crisis, but a measured budgetary response to falling inflation. This can be seen in the fact that rates were once again dropped this week, at a time when most countries are starting to put them back up.

What really sums up present day Turkey vis-a-vis worthiness as a property investment destination is the great irony that Turkey ended negotiations with the IMF in 2009, and in 2010 both Ireland and Greece have been forced to accept financial aid from the IMF and EU in order to stay afloat.

The balance of stability, high growth, high liquidity, low property prices and low interest rates is sure to make Turkey a favourite with investors in 2011.

2: Brazil

20 million people brought out of poverty and 27 million people added to the middle class, just two key achievements of President Luiz Ignacio da Silva. Achievements he made through programs like the Bolsa Familar, a scheme to help people out of poverty, and Minha Casa Minha Vida to help low income families afford to buy a house, achievements that have brought about a housing shortage of 7 million and growing.

A housing shortage is one thing, but we are actually talking about real demand here, demand from people in a population of growing affluence, in one of the world's fastest growing economies. But best of all, property investors can now benefit from it directly.

Affordable housing in emerging markets -- especially those with huge populations, rapidly growing economies, and growing affluence -- is a good investment but it has always been very hard for foreigners to buy into developments in such schemes; because they are aimed at the local community they are marketed in the local community.

That has been changed in and by Brazil, where foreigners can now invest in developments like Dr Gerlado Furtado, high quality affordable apartments in Central Natal city at 20% below market value. Golden opportunities like this, which are probably as close to zero risk as we will get in the property world, Brazil is sure to be a hot market in 2011.

3: Egypt

This is a market very similar to Turkey, but smaller in size and earlier in its development. Most of the research I do into Egypt concerns the holiday property markets in Hurghada, Sahl Hasheesh and Sharm el Sheikh. In these locations we have tourism rising rapidly, massive investment, massive development and some of the cheapest property in the world -- a dynamite combo, not to mention the sun, sea and sand.

Sahl Hasheesh has the potential to be on a par with Monte Carlo or Las Vegas by the time it is fully completed in 2030, and all the locations are seeing tourism grow at around 20% per year from Britain alone.

But most of all, these locations are unique in the fact that their tourism sector developed hand in hand with their property markets, so we have the chance to buy holiday homes that are being managed as part of the mainstream holiday accommodation stock. This is why guaranteed rental yields of 8,10 and even 12% are so common here, and why Egypt property will be a hot market in 2011.

4: USA

In the USA property values have plummeted. So much so that it is not only repossessed and distressed properties that are presenting bargains, but those on the open market having had their price dragged down by the massive repossession levels surrounding them.

A quality 2 bedroom apartment in a top quality resort near Disney World in Orlando for £50k, is an investment no one can question, and is currently available through agents in the UK.

Across America opportunities like that are presenting themselves, and while it may be a few years before values recover, people are happy to earn above average rental yields while they wait. With repossessions expecting to show no signs of abating any time soon, but the economy thought to be finally starting to recover, we can certainly expect America to remain a hot market in 2011.

5: Spain

Experts are predicting that the Spanish property market could be flooded with distressed and repossessed properties in 2011, because of new rules enacted this September forcing banks to be more upfront about their seized assets and to write down the value of all 2 year old real estate assets by at least 30%.

According to Fernando Acuna, of Pisos Embargados de Bancos a Madrid based listings website, which is currently advertising thousands of foreclosed properties, there are currently 100,000 foreclosed properties on the market, and this could triple in 2011 due to the new rules.

Whether Acuna et al are right or wrong, we do know that -- naming no names -- Spanish banks have hundreds of millions of dollars worth of bad loans on their books, and there finally seems to be a realisation that they must acknowledge losses and start to think about real values if the market is to be able to move forward. In short: they need to cut their losses and move on.

With the recovery now strengthening, especially in emerging markets, including those in Eastern Europe, and finally starting to look more solid in the UK we are sure to hear a lot about Spain in 2011.

6: Philippines

The Philippines was one of the Asian economies that continued to grow strongly during the recession. But unlike the others that did so, your China's and Singapore's there is no talk of a property bubble, and prices remain undervalued in the country. This makes it an exceptional investment opportunity. You can still buy top quality 2 bedroom apartments in central Manila for just £52k.

Manila is developing rapidly, and apartments in the city are enjoying massive rental demand from the growingly affluent local population owing to growth in the retail, manufacturing, and services sectors. Currently, average rental yields in the city are 6%. However, in the Lancaster Atrium development mentioned above, which is a tri-tower development currently onto its third tower, yields of 8% are currently being achieved on the two completed towers.

We are also now hearing reports of wealthy expatriate Filipinos returning to the country and buying up real estate. With this and the growingly affluent internal population there is a strengthening exit strategy for Philippines' property investments as well. With Asia becoming a hot bed for investment and growth, and investors keen to avoid bubbles that seem to be forming everywhere, the Philippines could be in for a big year in 2011.

7: Panama

Expect rapidly rising investment in Panama property as the US economy recovers in 2011. Panama has long been the number one destination for American retirees to buy property. The economy is to continue growing strongly as it has done throughout the crisis; according to the IMF the economy will show 6.2% growth this year, and 6.7% next year. With the Panama Canal -- which along with the Colon Free Trade Zone accounts for 3/4 of Panama GDP -- still proceeding towards 2014 completion, global investment in Panama will soar as the world economy recovers.

8: Malaysia

Another Asian tiger where we have no fear of a bubble. When Malaysia became one of the few countries in Asia to fall to the recession it did not look good. However, much like Brazil, the recession was short lived. In fact, according to official figures Malaysia fell into recession in the fourth quarter of 2008, and was growing back out of it in the first quarter of 2009, with a strong recovery beginning in the second.

The property market did not crash, because it did not have a bubble. While property prices in many Asian countries were growing at between 30 and 100 percent per year between 2002 and 2008, Malaysia's growth was being carefully managed and kept at the sustainable level of 10% per year.

Thus homes remained affordable for the population and there was no problem with homebuyers overstretching on loans they couldn't afford. This meant no overvalued property and no overleveraged owners, no sub-prime crash and no correction or bubble to burst.

Also, much like the Philippines property is comparatively cheap in Malaysia. You can currently buy high end 3 bedroom apartments in central Kuala Lumpur for just £90k. Now, with growth recovering throughout Asia, a focus still being put on stability, and Malaysia's proven long term stability, it is sure to be a big investment hit in the coming years.

9: Lebanon

This is a strange one, what with its war torn history and frequently heightened tensions with Israel. But Lebanon is under the protection of the UN, and while that may not have meant much once, with the US under Obama, who is not as staunch an Israel supporter as his predecessor, and reliant on international support for the US' expensive war campaigns as he tries to rebuild the economy Lebanon is safe for the moment.

That out of the way we have an economy that is growing rapidly and that has continued to grow rapidly throughout the crisis. In fact the IMF is predicting a growth of 10% this year and 8% next year, following growth of 7.5% in 2007, 9.3% in 2008 and 6.9% in 2009.

The 2006 war wiped the slate clean and investors are taking advantage to get in at the grass roots level as the infrastructure is rebuilt, telecoms, electricity, mobile telecoms, internet, satellite TV, retail, and outsourcing are all enjoying exceptional growth, as is construction and the property market.

With the war nearly 5 years behind it, Lebanon will be a lucrative property investment destination for those brave enough in 2011.

10: Indonesia

Not to jump on the Civets bandwagon but Indonesia has bags of potential as a property investment destination. It fits the Asian model of rapid population growth, population migrations from rural to city, and growing affluence in a rapidly growing economy. Property is still affordable for the local population and set for rapid rental and capital growth. It may not happen in 2011 but Indonesia will see a big jump in foreign investment.

Europe's Big Markets Should be Worried by the Growth of Turkey

2010-12-10T14:02:35+00:00

Spain, Italy and France should be quaking in their boots as Turkey -- a country that already holds great appeal among tourists and property buyers -- becomes the fastest growing economy in Europe. Julian Walker, director of the firm said:

"Since 2002 and especially 2005 the popularity of Turkish property has risen almost constantly if steadily, and little wonder: a country with three gorgeous coastlines to different oceans, each with very different characteristics, all sharing sun, sea and sand, in a country that enjoys 300 days of sunshine per year and some of the lowest priced property in Europe and the world.

"For Turkey now to be the fastest growing economy in Europe, giving it even more resources to funnel back into the infrastructure, Italy, France and Spain should be quaking in their boots."

The statements were made on the company blog, and came in response to the statements of Turkish Economy Minister Ali Babacan who called on the government to increase its forecast for growth in 2010 after an 18.9% growth in the industrial production index for October.

"Industrial output increased by 9.8 percent in October. The recovery in Turkish industry started in October 2009, and now we see a significant increase in the industrial production index. This shows that we, as the government, need to revise year-end growth expectations upwards," he said.

Spot Blue is currently marketing property in Turkey priced from £25,000.

Istanbul Property: A Chance to Get in Early into a High Growth Market

2010-12-05T09:33:34+00:00

You don't come across deals like this every day; a development complete with a huge array of facilities in an emerging area of Istanbul, offering studio apartments from just over 18k.

The Turkish property market is currently one of the hottest emerging markets in the world; well respected publication Global Property Guide recently issued a research report titled Turkey: The Best Residential Property Investment in Europe?

As with most emerging markets the main cities see the most rapid growth. In Turkey the coastal areas are thought to be matching them but data is always more readily available on the cities. For example the research report from Global Property Guide showed how undervalued Istanbul property is by comparing the average property price per square meter in the city, which it put at 2,386EUR to other major cities around the world like Bucharest (Romania) at 3,484EUR psqm, and Athens (Greece) with 6,622 EUR per sqm.

magine we had a time machine, while some people would go forward and bring back sports predictions, I would go back and buy property in London. Properties that could be bought for £10,000 to £20,000 30 years ago are now selling for £265,000 (based on an actual sale). This is the opportunitity we have in Istanbul now with properties like the Center Point development, the opportunity to get in early in a high growth market.

The Center Point development apartments are the cheapest I have seen in Istanbul, and because of its impressive array of facilities it is almost certainly to smash the average rental yields. The facilities include:

6 movie theatres
Car parking for residents
Shopping centre
Outdoor swimming pool
Turkish bath, Sauna, Jacuzzi
Fitness centre, Tennis court, Basketball
court, Jogging track, Walking paths
Restaurants/Bars/Shops
Children's playground

As with any property purchase, regardless of price, those considering buying in Center Point should conduct research into the development and developer, but pending that this is an exceptional bargain.

UK House Prices: Where are we Now?

2010-12-04T22:00:16+00:00

Apologies to my regular readers for the delay between posts on UK house prices, but I started to feel like I was just saying the same things over and over again. To be honest what I say here will not be very much different.

The government is still dragging out the austerity measures, especially the millions of public sector job cuts it has said it will make. If the government cut 5 million public sector jobs it would be terrible for the housing market, but probably a bit better than 15 million public sector workers living in fear and uncertainty about their employment future -- a state that few people look to buy a house in.

Mortgages are falling, and according to most indices, including the Land Registry, Nationwide, Halifax and Hometrack prices are falling as well. Nationwide said house prices were down 0.3% on the month in November, but what is more significant is that the year on year gains, which scaled the dizzy heights of a 10% gain in April this year, is now down to just 0.4%, down from 1.4% in October.

The index showed a 1.3% contraction quarter on quarter. The Halifax says prices were also down 1.3% in the three months ending October compared to the previous 3 months. This was in an other wise positive month, when the 1.8% month on month rise failed to make up for the 3.7% record contraction seen in September.

Few people are now denying that UK house prices are going through the foretold second-dip -- foretold by many analysts ever since prices started rising in April 2009. Instead of admitting defeat the market bulls have gone back to talking about how foreign buyers are fuelling rising prices in the south west and central London, much like they did during the first dip.

You would be forgiven for thinking I am happy that we are in a second dip. I am not happy for any homeowners that go underwater with their loans, not for any builders that go out of business (though I don't think it will go that far this time), but I am also not happy that first time buyers are still priced out of the market in the UK. Property is overvalued and, with no HIP or "wait and see" attitude to restrict supply, this is the correction -- part II.

Confidence in Turkish Investments Returning to Pre-Bust Levels

2010-12-03T16:56:29+00:00

The revered Private Equity Confidence Survey (PECS) from Deloitte has found that investors are feeling similarly confident in the outlook for Turkey now as they did before the crash in the first half of 2007.

The latest report, which surveyed 50 investors in September, said that many of the responses now are similar to those seen in the first half of 2007. "Thus we might conclude that investors' confidence in Turkey has now fully recovered from the problems of the global recession," said the report.

The report also said the Istanbul Stock Exchange ISE-100 index was recently testing new highs, just above its previous peak in late 2007.

"In Turkey we do not see the fears prevalent in some Western European countries that lingering weaknesses in the banking sector will hinder lending and therefore recovery," the report said. "The banks appear to be in robust good health. Government finances are not under particular strain. The contrast with the weaker members of the eurozone is dramatic."

This is also reflected in the property market according to Turkish property agent Spot Blue, director of the firm Julian Walker said:

"We have seen confidence in the property market rising steadily since the second quarter of 2009. We live in a changed world, where Turkey is not only the fastest growing economy in Europe, but is also among the most fiscally stable. This can only lead to increasing confidence in property investments in the country."

Spot Blue is currently marketing property in Turkey for sale from £25,000.

Will Spanish Market be Flooded with Foreclosed Homes in 2011?

2010-11-29T22:25:26+00:00

There is a growing consensus that the Spanish property market is set to see the number of foreclosed properties coming onto the market massively increase in 2011.

The main source of the reports is Fernando Acuna, the co-founder of a foreclosure-sales website operated by his Madrid-based company Pisos Embargados de Bancos. Acuna first reported that the banks could flood the market in 2011, and the latest is his saying that the number of properties could triple.

"Lenders took on an immense amount of property from developers and homeowners and now they're being forced to offload the dead wood," says Acuna.

Acuna believes that the accounting rules set out by the Bank of Spain will make the banks sell off their stocks of foreclosed properties at a faster rate. The new rules force banks to accept a 22% drop in the value of real estate assets held for 2 years or more, and record foreclosed properties within 12 months.

Acuna's beliefs make sense, and in fact we have heard several announcements of mass sales by two Spanish banks since September.

On the other hand: Acuna can only be classed as a secondary source on the subject because of the potential for bias. Also, the new rules came into effect in September, we would expect the number of properties to have accelerate in October and November, as these are two of the hot months for overseas property sales, or, even more likely a rush on sales before the rules came into effect.

Now, with the rules in play, the banks will have accepted the 22% reduction in the price of any assets held for 2 years, and recorded any properties repossessed in the last 12-72 months. This is done.

In my view the banks may accelerate the rate at which they sell off their properties, but they will not flood the market. I say this because, in comparison with the 60% reductions we are seeing in American foreclosure sales, 22% is getting off lightly. If the banks were to flood the market they could risk bringing down the value of the assets far more quickly than the rules are.

With this belief in mind I find it more likely that Acuna simply wants to build hype for a strong January and February selling period -- and who could blame him, it is just good business.

Turkish Agents Advises Buyers to Conduct Research

2010-11-26T16:51:34+00:00

There seems to be something in the air. Following the piece we published here yesterday, on overseas property agents getting a raw deal, UK based Turkish property agent Spot Blue has made some similar points on its blog.

The firm warned that buyers should conduct their research before buying property in Turkey, and highlighted the criticisms often levelled when internet searchers come across what looks like the same property being sold at massively different prices.

Managing director of the firm Julian Walker said:

"To our knowledge, we are the only agent in Britain that carries out extensive checks on the developers we work with including vetting through the chambers of commerce in both countries. But we still recommend that people do their own research, perhaps even research more thoroughly than they have or would for a purchase in the UK.

"For example, we recently spotted on a forum, potential buyers complaining that they had seen UK based Turkish agents advertising the same property at massively different prices, but it turned out that one of the properties was more expensive because it was being sold furnished, and had been lived in as oppose to rented out. People believe that a web page and a few pictures can tell them all they need to know to make decisions on a property, it cannot."

Spot Blue is currently marketing property in Turkey for sale from 25,000 GBP

Overseas Property Agents Getting a Raw Deal

2010-11-25T15:43:00+00:00

In my job, I spend a lot of time on forums. During the course of my time I come across a lot of posts criticising overseas property agents for displaying what seems like the same property at varying prices. Some were genuinely asking why this happens, and advising everyone to shop around but others were all but accusing those selling at a higher price criminals. The comparison to UK estate agents is particularly unfair.

Overseas Property Agents and UK Agents No Comparison

In the UK, an estate agent will market individual houses from an individual vendor, a simple line of communication, with both equally determined to stay apprised on the situation, adjust pricing etc.

An overseas property agent markets developments, with many properties, on behalf of developers.

Oh UK estate agents would never market the same property at a different price? So we never see two properties on the same street -- the same properties -- being sold by different people through the same agent at different prices? No one knows what these properties are like inside, as that is also a factor on price.

UK agents would never market a property at far more than it was worth simply because the vendor wanted that price? No none of them ever did this to win instructions during the crash?

Some may accuse me of being unfair to UK estate agents, that is not my intention, like with any industry there are the good and the bad, and they have families to feed too, so who could blame them for indulging a seller to win an instruction? Not me anyway.

It is important to remember, prices are set by the vendor on the advice of the agent, it is the same overseas as it is at home. Multiple properties on the same development sold by different sellers will be largely the same property, but the vendors motivations being very different will make the price very different.

Communication is the Biggest Problem for Overseas Agents

I work in overseas property, and the biggest problem is communication. If an agent has over 500 developments to market they cannot be expected to keep finding out up to date information on every property, availability, prices. This would take an army of staff without even making a sale???

Thus, they rely on the developers to keep them updated, which sadly rarely happens - they are working with how many agents around the world? They are in the market, they see the price needs to change and change it, but if their agents in other countries are bringing in sales at a higher price, why should they tell them to drop it?

Most of the agents I work with know that they will not be the only agent marketing a property, and specify in the contract that they must have the lowest price. But again, how can they keep track to make sure this is happening.

However, in the case you laid out it seems the most likely scenario that the villas are being sold by 3 different private sellers in the same development. So it is technically different prices for the same property, but in reality it is different prices, set by different people, with different circumstances and motivations, on the same type and size of property.

People Should Always Shop Around Though

I agree with the posters who recommend shopping around, people should always research their purchases to make sure they are getting the best deal, but not because UK overseas agents are ripping people off, simply because it is common sense with any purchase. Two examples:

I once wanted to buy an air rifle - I chose the one I wanted, and then shopped around, dozens of shops were all selling it at different prices. And the same happened when I bought an Amatuer Radio set up (Kenwood T550i I'll never forget you), loads of different shops, loads of different prices. We should always shop around on major purchases, and none more major than a property, at home or abroad.

Brazil Top Overseas Property Destination Says Agent

2010-11-22T15:38:09+00:00

Brazil is currently the most popular country in the world of overseas property in terms of interest, Colordarcy has announced. The London-based overseas property investment consultancy is receiving in excess of 300 enquiries per week, but unfortunately only 30% of the leads qualify because of difficulties in obtaining finance.

"We get close to 300 enquiries for property in Brazil each week, but we have to turn 70% away because the lack of finance in Brazil at this stage," said Loxley McKenzie, Managing Director of the firm.

"However, we urge investors to buy now if they have the capital, because we expect prices to rise by at least 20% upon mortgages re-entering the market," he added.

Brazilian property is currently very hot news indeed, mostly because of the fact that several Brazilian developers have begun making affordable housing developments in Brazilian cities available on western markets.

For those wondering why that is such a big deal, the policies of President Luiz Inacio Lula da Silva have led to a supply shortfall of over 7 million in the Brazilian housing market, that is 7 million more families in a position to buy a house than the number of houses for sale. The deficit would be smaller, but the shortage is most severe when counting quality affordable housing, as much of the affordable stock is in a bad state of repair.

"If an estate agent had served as the Brazilian President for the last 8 years he couldn't have laid better foundations for the Brazilian housing market than da Silva did in his two terms," said McKenzie.

The Brazil constitution sets out that the maximum a President can serve is two terms, but the Brazilian people recently elected da Silva's chosen successor, Dilma Rousseff, who is not only of the same party (Workers' Party), but was da Silva's chief of staff. She is expected to keep going on the same path as da Silva.

"One of his most successful housing projects is the Minha Casa Minha Vida project, which provides financial incentives and assistance to low income families in order that they can afford to buy a house," he added.

"But the biggest help was his decisive and excellent economic management. The way Brazil's powerful growth has been reinvested and managed to provide the maximum number of jobs has led to some 20 million people coming out of poverty in the last 8 years da Silva was President. As well as that the number of Brazilians classified as middle class increased by 29 million during the period. This massive growth in affluence is why there is so much demand for housing," McKenzie concluded.

But without publicity no one would know about the housing shortfall, thankfully this is not a problem for Brazil property. In fact the level of exposure it is receiving is a contributory factor in the volume of enquiries being received by Colordarcy. Exposure including 2 Brazilian developers winning best in class at the 2010 Overseas Property Professional Awards.**

- ENDS -

_________________________________________________________________________

Notes to the editor:

**Grup Immobiliari Natal Brasil won Best Developer Latin America for developments like Dr Geraldo Furtado, and Invest in Brazil won Best Developer International for developments like Tambaba Country Club.

Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Their aim is to provide their clients with properties that offer the unique combination of strong growth returns and cash flow positive income. Investing in positive cash flow property significantly reduces the risk because the property will pay for itself regardless of market conditions, employment status or other financial commitments.

Colordarcy provides complete support before, during and after a sale, including finding tenants, financial assistance, viewing trips and currency services. Colordarcy are proud members of the 'Association of International Property Professionals' (AIPP), and abide by its code of conduct, one established to protect the buyer, by ensuring members follow professional guidelines and procedures.

For more information, supporting pictures or logo artwork, please contact:

Loxley McKenzie
Colordarcy Investment Ltd
2 London Wall Buildings
London
EC2M 5UU
Telephone: +44 (0) 207 100 2393
Email: press@colordarcy.com
Web: www.colordarcy.com

Turkish Tourism Continues to Rise in 2010

2010-11-12T16:19:47+00:00

2.3 million British passengers arrived in Turkey in the first 9 months of this year. Given that the total number of British passengers arriving last year was 2.4 million, this year is looking like a good one for Turkish tourism.

It is little wonder, like the Turkish economy and dozens of other sectors and industry, 2009 built strong foundations for growth in 2010.

In 2009 the Association for British Travel Agents reported that growth in tourism to Turkey from Britain would see growth accelerate from the running average of 20% per year to 25%, as the strong euro forced Brits to look outside the Eurozone to increase their holiday spending money. This was set to bring more repeat business for Turkey in 2010, especially given that the Euro is still strong against the pound, although it has fallen back slightly.

Then this year, Turkey has seen things further boost tourism growth. Firstly it was voted the number 1 destination by readers of the prestigious Conde Nast Travellers magazine. This would almost certainly make more people give Turkey a try, if only because of the level of press coverage it brought.

Speaking of press coverage, that is another reason why British tourism to Turkey is rising. Turkey has been covered in some 6000 features in the British press this year.

According to Turkey property agent Spot Blue if Turkey doesn't hit the 30 million visitor target in 2010 set during the boom, then it almost certainly will in 2011.

"Turkish tourism has been rising for many years, and we keep seeing new flights and increasing frequency of flights, all of which keep visitor numbers going up. The you have the succession of visa-free deals Turkey has agreed this year, all promising to increase tourism," said Julian Walker, director of the firm.

Spot Blue is currently marketing property in Turkey for sale from £25,000.

State-Owned Turkish Property Giant Offers 25% Stake in 1b Lira IPO

2010-11-07T10:22:47+00:00

The latest in a series of IPOs by Turkish real estate firms this year will see state-owned Emlak Konut offer up a 25% s stake in the form of 625 million shares. The sale is expected to raise over 1.34 billion Turkish liras.(£590m), according to sources close to UniCredit Spa and Turkiye Sinai Kalkinma Bankasi AS, who are managing the sale on November 8/9.

This year has seen 5 Turkish real estate investment trusts make public offerings, all to great degrees of success. With rapid economic growth, low interest rates, and a rapidly growing mortgage market fuelling a similarly growing housing market, Turkish real estate is hot news at the moment. Shares and JV investments are in such short supply -- because of the immaturity of the market -- so they always go down a storm.

Owned by government housing agency Toki, Emlak Konut buys land from the government, and develops it into residential housing complexes.

"We will use the proceeds from the IPO in new projects," Murat Kurum, chief executive officer of the company said in the statement.

The company is a very exciting prospect: it currently holds 6.9 billion liras worth of assets, including 5 million square meters of land for new projects. This is top of the 350,000 homes the company has already completed. In the first 9 months of 2010 they sold 558 million liras worth of properties, for a net income of 201 million liras. As well as the 5 million square meters of land, the firm currently has contracts in place to build another 100,000 units.

According to Kurum, the IPO is part of a concentrated fund raising program aimed at raising 5 billion liras.

The spate of IPOs are proof that the Turkish property market has made the transition from niche emerging market to mainstream investment.

"The number of IPOs coming from Turkey this year, as well as the success they are enjoying, is further proof of the growing and widespread appeal of Turkish property investment products in Europe, the UK, and around the world," said Julian Walker, managing director of the firm.

Spot Blue are currently marketing property in Turkey for sale from £25,000.

Democrats Face First Judgement for Underestimating Crisis

2010-11-02T13:12:17+00:00

We have found an example of government's being overly optimistic as we have talked about many times on this site, and, while we have often found difficulty finding such examples, this time we have found a doozey -- in fact it is probably the best example ever: The US Obama Administration as it entered office.

Now they face their first election: the 2010 midterm election will be held on Tuesday, November 2 with at least 36 of the 100 seats in the Senate being contested and all House seats coming up for election. How dearly will the Democrats pay for their mistakes?

The entire global financial crisis was triggered by a crash in the over-bloated US sub-prime mortgage market, which sent shockwaves to the heart of almost every bank in, first the UK, then Europe and then the world.

We know from history that such huge catastrophic financial events lead to protracted periods of unemployment, not least because depression is a powerful motivator to feel unmotivated, and what is a recession if not depressing for anyone and everyone involved? It is depressing, confidence knocking and bank balance dropping misery. That's what, and we all know it, don't we?

Now, during the Obama election campaign what are apparently some of America's top economic minds badly underestimated the depth the crisis would plumb; how far it has plumbed already and it is still a long way from being over.

Looking back now at the scenario laid out in justification of the Obama economic plan, what hits you straight away is the level of optimism as to the economy's ability to nurse itself back to positive growth -- if American's can be accused of one thing it is being too patriotic; to confident in their own economic vastness and vastness in every other sense that they fell off the top spot of world's number 1 superpower (I think Reagan got the cup?).

The unemployment rate would peak at 9 percent, and then fall rapidly, said the overly-optimistic Obama economists. Fiscal stimulus was needed only to mitigate the worst, or as Lawrence Summers -- later the administration's top economist reportedly suggested in a memo to the President-elect: as an "insurance package against catastrophic failure,".

Analysts are now saying that the Obama plan was flawed and inadequate from the word go. Some suggest that he may have found it difficult to get a bigger stimulus package through Congress, but surely it would have been better to have tried and failed to receive an adequate stimulus, rather than a stimulus that was doomed to fail from the start.

One must assume that the Democrats behind the Obama plan either believed their own rhetoric, or were genuinely shocked by the severity and depth of the crisis. That is not the point though; time and the upcoming election will tell us how badly the Democrats will be hoist by their own petard.

Turkey Property Outpacing the Rest

2010-11-02T11:18:15+00:00

Turkey property is now one of the top choices for private property investors in the UK, overseas property investment consultancy Colordarcy has announced. In explaining possible reasons for the rise of Turkey, the firm cited the countries impressive economic growth and fiscal stability, as well as the dire state of the EU, which has devastated many of Turkey's former biggest competitors.

Loxley McKenzie, managing director of the firm said:

"Turkey is a very unique story of the credit crunch. While it was hit hard by the recession in 2009, because of the strength of the Euro, tourism wasn't as hard hit as many countries and the banking sector was barely affected at all. Further, years of fiscal reform and restraint in Turkey -- paying down national debt, reducing deficits and such like -- gave the government the flexibility to deal effectively with the crisis.

"As a result the Turkish economy has powered out of a year in recession to become one of the fastest growing economies in the world, and the fastest growing economy in Europe and the Organisation for Economic cooperation and development, with 11% growth year on year in the first half of 2010. On top of that, the low rates in Turkey are a long term fiscal response; liquidity is high and property prices still among the lowest in the world."

But most importantly of all according to Colordarcy, is the eradication of much of Turkey's competition, as well the hurdle of EU accession.

During the boom, Turkey was a big hit with holiday home buyers, while investors favoured countries on a more straightforward path towards EU entry. Countries like Estonia and Poland displayed the massive property growth that EU entry brought. This made the next wave of likely entrants; Montenegro and Albania et al, favourites with investors. Meanwhile the unofficial block on Turkey's accession by France and Germany prevented it from reaching its full potential popularity.

Now Turkey is out growing the EU. As emerging markets are set to lead the world in terms of purchasing power parity according to HSBC, Turkey will be a dominant force in the European economy.

The EU grew 2% year on year in Q2, and its fastest growing economy this year, Slovakia grew 5%, the Turkish economy grew 10.3%.

"All this makes Turkey property now a popular choice for investors, adding to its popularity with holiday home buyers to make it one of the most popular countries for overseas property purchases as a whole," said McKenzie.

Colordarcy are currently marketing the perfect property for this new wave of incoming investors. The Garden City development offers luxury apartments in an upcoming Istanbul suburb, with a 7% rental guarantee for the first year from £46,500. The development is designed with buy to let investors in mind, and it is a perfect entry level investment for the Istanbul market. There are only 20 apartments left of 84.

Talk of IMF Exec Position Boosts Confidence in Turkish Property

2010-10-30T11:51:07+00:00

Any remaining doubt over whether or not this was a historically important stage in Turkey's transition from an emerging market, into, not only an established market, but a dominant force in the global economic infrastructure, deserving of its size and strategically important location, it was dispelled this week when Dominic Strauss-Kahn, chief of the International Monetary Fund called Turkey the most suitable emerging market candidate for a seat on its executive board.

The European Union has given up two of its seats on the board, so that they may be given to emerging markets. After complimenting the move, Strauss-Kahn said:

"I think Turkey is the most suitable candidate for a post on the executive board", his view is commonly shared according to sources.

The IMF head went on to assess Turkey's recent economic performance, highlighting the 7.5-8 percent growth. "I think the government is managing the economy very well", he said.

According to Julian Walker, managing director of Turkish property specialist Spot Blue, such statements alone can boost confidence and lead to increasing demand for Turkish property from foreign buyers.

"If Turkey does indeed get a seat on the executive board on the IMF, it will be the latest in a line of things which have boosted confidence in the stability and potential of Turkey. However, the statements alone, from such a prominent figure will also boost confidence, even if only on the sub-conscious level," he said.

Spot Blue is currently marketing property in Turkey from as little as £25,000.

Turkish Property Recovering Strongly Say Experts

2010-10-22T09:16:28+00:00

International real estate brokerage Cushman and Wakefield are the latest to come out in strong support of the investment opportunity that is Turkish real estate in 2010, quoting the country's huge economic growth and fiscal stability, which, it says are both among the best-in-region.

"Recent growth has been even faster than expected, aided by strong employment growth, and low interest rates," the report said. The firm also commented on Turkey having the "quickest stabilisations" and "strongest recoveries" in Europe, with rising employment and strong growth cited across many sectors.

Unlike many reports, the firm added that Turkey could be affected by a drop in imports from Germany and France, however, given the new relations Turkey is forming in the east and around the world, the effect of this, if any, will likely be minimal.

Retail and office rentals are growing rapidly, while industrial rentals are actually declining.

This, according to Alan Robertson, managing director of global real-estate services firm Jones Lang LaSalle, is directly correlated to Turkey's economic outlook.

"When the economy is not good for the industrial sector, industrial rents go down," said Robertson. "There is a direct correlation."

Robertson added: "the industrial sector is a little behind the office sector, and will recover next year."

"When you have gross domestic product growth like Turkey's, you have to expect a correlation in the real-estate market," he said.

According to experts the residential sector is recovering nicely as well. David Walker, Vice Chairman (UK) of the Board for the Turkish British Chamber of Commerce and Industry and Director of Spot Blue comments:

"The opinions from those at the heart of the construction sector in Turkey, are very positive and there is a great sense of self belief in Turkey and its economic outlook for the country post global downturn. I have to say I personally believe this has always been the case; optimism has remained high in Turkey and this, coupled with hard work and the steady decline in unemployment, has meant that this faith has translated internationally. We are seeing greater numbers of Europeans seeking to invest in Turkey's growing economy and property is one of the most popular means of doing so, offering two fold benefits for purchasers: an investment into a growth market and a tangible asset that buyers can enjoy personally too."

Spot Blue is currently marketing property in Turkey from as little as £25,000.

Turkey is BRIC of Europe Says Cameron

2010-10-14T15:30:06+00:00

Turkey is the "BRIC of Europe," said British Prime Minister David Cameron in a message sent to an important Turkish/British business conference held by the organized by the Turkish-British Chamber of Commerce and Industry (TBCCI) this Wednesday.

"Everyone is talking about BRIC countries and the rapid growth in [the group's] economies of Brazil, Russia, India, and China. We think that Turkey is a BRIC country of Europe," Cameron said.

Cameron also said that trade between the two countries should be increased on a much greater scale. Cameron said that, with almost 1800 British companies operating in Turkey, that Britain is the second largest investor in Turkey. He said that both countries should work to double trade between Britain and Turkey, which he said currently stands at $9billion, over the next 5 years.

Mehmet Buyukeksi, president of Turkish Exporters' Assembly, or TIM said "Both countries should aim to increase trade volume to 20 billion in near future."

David Reddaway, the British ambassador to Turkey, said Cameron had proven Turkey's importance by staging his first official trip as prime minister to the country in July.

"We support will support Turkey's membership to the European Union and not just because of our goodwill but also [because] this serves the U.K.'s interest as well," he said.

David Walker, director of Spot Blue said at the event.

"I was excited about this event, given Turkey's recent economic performance as the fastest growing economy in the OECD, and so far it is living up to my expectations and then some," he said.

Spot Blue is currently marketing property for sale in Turkey from £25,000.

Turkish Economy Continues to Perform Strongly

2010-10-07T15:45:30+00:00

The Turkish economy continues to go from strength to strength.

This week the IMF has revised its forecast for Turkish economic growth in 2010 from 5.2% forecast in April this year to 7.8%. This was the second revision upward in 12 months; the 5.2% April forecast was an increase on the 3.7% forecast in the World Economic Review of October 2009.

The IMF revision followed a revision, or rather an upgrade by financial ratings agency Moody's.

Moody's upgraded their outlook on Turkish 2 year bonds from stable to positive. Covering the story on the company blog, Turkish property agent Spot Blue opened with:

"Moody's finally, finally opted to do the decent thing," said Tim Ash head of emerging-market research at Royal Bank of Scotland Group Plc in London, in response to the ratings agency changing the outlook on Turkey's Ba2 local and foreign-currency government bond ratings to "positive" from "stable,".

A fittingly gripping opening to a particularly exciting story. The firm agrees that the upgrade has been a long time coming, the firm wrote on its blog in August that the continued economic growth of Turkey combined with its fiscal restraint make an upgrade to investment grade status "continuously more likely".

Spot Blue is currently marketing property for sale in Turkey from £25,000.

UK House Prices: A Second Dip Looks More Inevitable than Ever

2010-10-01T09:24:45+00:00

UK house prices are continuing on their psychedelic journey through unpredictability; the odds continuing to stack up against them rising, and the continuing to rise against all odds. However, this time it really does seem like the run is going to end, and a second fall is going to happen.

Bears, along with many pundits, analysts and commentators have been predicting a second dip ever since prices started rising in March 2009. But prices have continued to grow.

Last year the growth was fuelled by tragically weak supply. As the market improved, demand also started to grow, with mortgage approvals going as high as 50k per month, which was high for the market but nothing compared to peak or even normal market conditions.

Since supply started rising when the incoming (and some would say incumbent) coalition government abolished the Home Information Pack, the pundits have increased their calls that a second dip is inevitable.

The government is also planning to cut millions of public sector jobs, which will further increase supply and drop demand. In fact it is already doing so. No one wants to buy or sell their house when their job might be on the line. Worse, because of the government's dilly dallying, many more people than those who will lose their jobs have an imagined axe above their head. As a result, mortgage approvals have been falling for the past few months.

Each time an index comes out showing a fall, the pundits think that this is the start of the second dip, but then more rises are recorded by another index. The latest conflict was Hometrack, which revealed its several consecutive monthly price drop, and the Land Registry which said prices climbed 0.3% in August, and 6.7% in the year ending August.

So far fear of public sector job losses will be keeping down supply, and along with low interest rates, bolstering prices. But when the jobs are actually cut there is a real possibility that a flood of homes will start coming onto the market.

Worse, today the Bank of England said it is toughening the criteria on mortgage lending. The tightening of the mortgage market was a large part of the reason why the UK housing market crashed, and this, on top of everything else makes a second dip look more inevitable than ever.

Istanbul Property Shaping Up as Favourite in Turkey

2010-09-30T15:43:07+00:00

Recent reports have highlighted Istanbul as an excellent property investment opportunity.

Rightly, few cities in the world can rival Istanbul in terms of cultural diversity. It is also near unique in the fact that it is a burgeoning metropolis, which has coastlines to two different oceans.

According to Julian Walker, director of Spot Blue, the Bosphorous Strait, with its famed natural harbour the golden horn is a particular attraction. He said:

"Prime attractions such as the Bosphorous Strait encompassing the natural harbour, the Golden Horn, are helping to propel Turkey into the sights of tourists as well as buyers and Istanbul boasts a rich cultural and social scene. The International Film festival held here annually is one of the most important in Europe and on top of these high profile events, activities such as opera, ballet, pop concerts, art displays and museum exhibitions continue throughout the year."

On top of its appeal as a destination to visit and buy holiday homes, Istanbul property is also a fantastic investment says Walker.

"Istanbul offers an excellent investment opportunity, attracting an increasing domestic market looking for property rentals as well as international visitors. These factors combined with the Turkish economic growth means that developers are struggling to meet demand from buyers. Sales of properties are strong considering the global economic climate and more developments will be coming to the market to suit the cosmopolitan communities. Studio to 4 bedroom apartments are available, all with modern interiors and high specification finishes, and it tends to be the European side of the city that is favoured at present."

Spot Blue is currently marketing property in Turkey from £25,000.

Foreign Demand for Turkish Property back to 2008 Levels

2010-09-25T17:16:19+00:00

Foreign demand for Turkish property is almost back to 2008 levels, and could be back to the levels seen in 2006/07 by next year, Turkey based real estate agent New Home in Turkey has announced. The firm has said that the strengthening recoveries in the UK, but particularly in eastern Europe and the Middle East, combined with Turkey's rapid economic growth explain why demand has grown so rapidly this year.

"It has been like a perfect storm for Turkey this year. We have powered out of recession, and because our growth has been so strong it has drawn attention to our low inflation, low interest rates, low budget deficit and high liquidity, setting Turkey apart as one of the best investment destinations in Europe," said Aydin Cakir, director of the firm.

"In terms of growth we are up there with the emerging markets, Brazil and China, but in terms of economic, political and fiscal stability we are more like an established market. Today's buyer is favouring stability above potential returns, but when you have a country capable of delivering both it becomes a no-brainer," he added.

The firm's statements follow a report by the much revered Global Property Guide calling Turkey the best residential property investment in Europe, that was, in fact the title of the 43 page report. This was the second time the publication had recommended Turkish property for investment this year.

The report was particularly focussed on Istanbul property, but this is perhaps as much a reflection on Global Property Guide data, which tends to focus on capital and major cities, for obvious scope-based reasons.

On top of Turkey property becoming a favourite with investors, the core holiday home market, which has remained active, because of the stronger Euro and other factors -- throughout the downturn, is now also reportedly enjoying some growth in activity as low budget buyers return. Given that the strengthening economic recovery is thought to be one of the reasons for the return of such buyers, it can be hoped that growth in demand from foreigners will continue to grow next year.

Turkish Property Benefiting from Resurgence of Low-Budget Buyers

2010-09-24T14:33:56+00:00

The Turkish property market is benefiting from a resurgence of low budget buyers in the last couple of months, Turkey based real estate agent New Home in Turkey has announced. The firm said that, while lifestyle buyers with slightly more to spend had kept much of the market alive in 2009, their return was welcomed at the start of 2010, and they were sorely missed as uncertainty over austerity packages and coalition governments dented confidence in the middle part of the year.

Aydin Cakir, the firm's director said:

"The Turkish property market, well the holiday home and foreign investor segments were not as badly affected as many around the world last year, because the middle of our price range was perfect for the mid-range lifestyle buyers who remained active during the crunch, and we benefited from the strong euro increasing the perception of high value for money on property in Turkey.

"None the less, the Turkish market was always very much geared towards the lower budget buyer (obviously with some regions being exceptions to this), with low property prices and low cost of living making it a favourite with this buyer group during the boom.

We saw a return of these buyers towards the end of 2009 and into the early part of this year, but it was fizzled out by the end of the stimulus, the EU debt crisis, the UK coalition government and other factors that dented confidence. Now there seems to be a sense that it is not going to be as bad as we thought, and buyers are returning."

Reports from New Home in Turkey and other sources have also highlighted that Turkey is benefiting from the severe lack of any competition in the low to mid-range markets. With Greece, Italy, Spain and Portugal all tangled in the debt quagmire, the fiscal stability and rapid economic growth of Turkey are making it a favourite for 2010 and 2011.

According to the firm, the traditional favourites are all back up there with Antalya, Side and Alanya property all reigning supreme.

18% of Overseas Mortgages from Conti for Turkish Property

2010-09-24T13:58:12+00:00

Overseas mortgage provider Conti has revealed that 18% of all mortgages arranged this year have been for Turkish property purchases.

Because French (43%) and Spanish (24%) mortgages share 67% of the remaining 82%, this means that Turkey is a dominant force in UK mortgage-involved overseas property sales.

What's more the other 2 are established markets, which goes to the trend of buyers favouring stability over returns, which therefore indicates a high level of confidence in the stability of the Turkish economy and property market. UK based Turkish property agent Spot Blue put forward a reasonable explanation for the current confidence in the market on the company blog.

After highlighting recent events including Global Property Guide calling Turkey the best residential property investment in Europe, and its winning the prestigious COnde Nast Travellers Favourite award, the blog reads:

"Combine this with the government's constant reform; reducing inflation (from 34.9% to 5.7%) and public debt (from 70% of GDP to under 40% of GDP) to their lowest in years, whilst more than tripling reserves (from 26.5 billion to 72.5 billion), all adding to confidence in the stability of Turkey as it proceeds toward receiving investment grade status.

"Finally we have the effects of all this reform; namely low interest rates and high liquidity, which both make it comparatively easy to buy property in Turkey, which in the coming months and years is more than capable of driving up prices. All in all it is an exciting time to be involved in the Turkish property market."

Spot Blue is currently marketing property in Turkey from as little as £25,000.

Optimism in the Overseas Property Industry as Low Budget Buyer Returns

2010-09-22T20:20:22+00:00

I had a good feeling today. For ages I have been a bit in the doldrums about the way the economy was going, worse than I had been at any point during the so-called credit crunch. This is because it was like we had the start of a rebound and it had been frittered away by political point scoring, and it felt worse because this time it seemed to be the government's fault entirely.

I know it is still a miserable time for many people, but in the overseas property industry, things seem to be looking up.

We are a business-to-business service provider for the property industry, and there is a genuine sense of optimism and belief that the worst is behind us and things are finally looking up. This has been building for a few weeks now, but I refused to get involved because I knew how easy it could all be snatched away again.

Of course it still could, but let's hope not.

Of the reports I am hearing, Turkey and Egypt seem to be the two best sellers for UK agents, along with heavily discounted properties in the states especially Florida.

I know a lot of agents are reporting the buyers have turned towards the safety of established markets like France and Germany, and this is most likely true for the mid-range buyers, where sales are still skittish. What we are talking about here is a resurgence of the low-budget buyer, happy to consider off plan property, but doing a lot more research.

In the case of Turkey it is seeing more demand from the mid-range buyers also, as it has properties towards that level, and is seeing increasing confidence as the economy booms and the government continues on its path of reform.

Recommending Turkish Property for Investment

2010-09-18T22:59:45+00:00

Regular readers of mine will be surprised by this, but if one of my relatives handed me a signed cheque and asked me to go out and invest in overseas property, the destination I would have for would be Turkey.

Turkey simply has everything going for it: strong growth, fiscal stability and restraint, low inflation, low interest rates, high liquidity and low property prices. The fact that none of its previous competitors are even close to matching it on any of the above is also a massive help.

You just can't get away from it; the EU issue is of next-to-know importance and Turkey is set to be one of the fastest emerging markets in the world in the foreseeable future. GDP has grown 11% in the first half of this year compared to the same period last year, (10.3% in Q2, beaten only by Singapore and Taiwan).

Global Property Guide is one of the my favourite publications; their in-depth research reports are second to none, and their predictions usually spot on (in fact I've not known them to get it wrong).

They have recommended Turkey for residential property investment twice this year. First in their 2010 global investment recommendations report earlier this year, and just this week in a report dedicated entirely to the massive investment opportunity that Turkish property currently presents. The report was titled: Turkey: Europe's Best Residential Property Investment, and accompanied by an article based on the research titled: Turkey: A Housing Boom Ready to Roll.

But I had made up my mind long before that. In fact I have been talking about how the massive economic strength of Turkey, and the fact that it has and continues to embrace Europe along with most of the rest of the world -- with greater ties, increased trade and even visa-free travel arrangements -- has made EU accession of fading importance, especially when you look at the state of the European economy.

EU accession was a stumbling block for property investors, who would consider Turkey, but tend to choose one of the countries with a more straightforward route to EU membership and the growth boost it was proven to provide. Now, not only is EU accession not necessary for Turkey, but Turkey is growing faster, and more fiscally stable than most (I want to say all) its European competitors.

It is hard to predict anything but growth in the Turkish economy for the foreseeable future, and there isn't many places you can say that of today. That is why Turkish property would get my investment every time.

Turkey: Europe's Best Residential Property Investment Says GPG

2010-09-17T14:39:23+00:00

Turkey property is the best residential property investment in Europe according to the Global Property Guide, who just released a report with a title to that effect. The 43 page report details how the rapid economic growth combined with low inflation, subsequent low interest rates, undervalued property, and high liquidity in the banking system to make Turkey property an excellent investment choice.

According to the report Istanbul is now the third most visited destination in Europe, beaten only by Monaco and London. It is one of the world's great cities, and property is clearly undervalued by a significant margin.

The report says that the average square meter price for Istanbul property is`2,386EUR, compared to 6,622EUR in Athens, 7,128EUR in Geneva, 9,961EUR in Paris, 11,851EUR in Moscow, 14,421EUR in London and 35,658EUR in Monaco. With all the economic indicators pointing the right direction, and property so grossly undervalued it is easy to see why Global Property Guide is so enthusiastic about Turkey.

Julian Walker, director of UK based Turkish property agent Spot Blue said of the report:

"This is a great report, we particularly liked the breakdown of what the Justice and Development Party has achieved, most notably reducing Turkey's debt to the IMF from the 23 billion USD to 7 billion USD in 2009 and bringing inflation from 34.9% to 5.7% in 2009. Of course the title: Turkey: Europe's Best Residential Property Investment was also great by us."

Spot Blue is currently marketing property in Turkey for sale from £25,000.

First Time Buyers Can Afford the Mortgages they Can't Get - What?

2010-09-14T22:12:27+00:00

First time buyers accounted for only 34% of UK house sales in July, down from 38% in June, according to data from the Council of Mortgage Lenders.

Though the data showed a 6% rise in mortgages for house purchase, the number is still far too low to bring hope or confidence to a fragile market, and the 2% drop in mortgages to first time buyers more than tips the scale into negative territory for most analysts.

The data did say that low interest rates mean average repayments are only 13% of First time buyer's salaries, the lowest percentage since early 2004. Homes and mortgages are definitely affordable for first time buyers, it is just a shame most of them don't have a sufficient deposit to get a mortgage -- 24% was the average deposit paid by first timers in July.

It is one of life's great ironies that first time buyers could get mortgages when they could scarcely afford the repayments, and now the repayments are manageable they can't get a mortgage. And don't even get me started on the fact it was bank's giving people mortgages that would take 90%+ of their disposable income that caused the madness in the first place.

Everyone keeps coming back to the same thing; here is a statement from the Guardian's coverage of the CML data, a Brian Murphy head of lending at independent mortgage broker Mortgage Advice UK:

"With public sector cuts and tax hikes around the corner, inflationary concerns and constant doom-mongering about a double-dip recession, buyers' confidence is hardly robust."

Yet Halifax is still showing prices rising, there is still the possibility that low interest rates will sustain prices, if only in flat territory. Rents are also rising, which, along with price reductions and low interest rates is propelling buy to let landlords and business to buy property in increasing numbers. The outcome of (this madness;) the current set of circumstances is that Britain could develop a renters culture, which could leave us with a more manageable, if not saner housing market -- maybe I'm a fantasist.

Agent's Most Reviewed Turkish Properties Indicative of Trends

2010-09-10T14:45:21+00:00

Turkish property agent Spot Blue has just reported on its most reviewed properties for this week from the website. Though it was only a top 3, the fact that 2 of those properties were in Fethiye was interesting, and prompted a look at the list on their site, to see if this dominance for Fethiye was there in the top 10 also.

It wasn't, but only because dominance is apparently being shared with Altinkum -- these are the only two towns to have two properties on the list, all the rest have only one.

Looking at the properties gives an indication as to why they have been chosen, and therefore an insight into the current buyer -- apparently value and price are still high on the list. The properties are all seemingly low priced for what they are, and so therefore offering fantastic value for money.

No 1 is a 3 bedroom villa 15 minutes from the beach in Fethiye (near the famed Olu Deniz) for less than £100k. The second is a 2 bedroom villa, also in Fethiye and also 15 mins from the sea for £84,000 -- this one is such great value it was picked up by the Guardian. No 3 is the first for Altinkum, a four bedroom villa, walking distance from the sea for an incredible £59,950. The second for Altinkum is 10 on the overall list, 1 bedroom apartments in a resort complex for £23,000.

According to Julian Walker, Spot Blue director the list is indicative of what is making Turkey such hot news with overseas property buyers right now, he said:

"It is all there to be seen! The level of value for money on offer in the Turkish market is almost unmatched and certainly unsurpassed by anywhere else in Europe,"

Spot Blue specialises in property in Turkey, with offices in the UK and Turkey.

UK Housing: Government Unlikely to Help First Time Buyers

2010-09-10T08:07:37+00:00

House Builder Redrow has called on the government to do more for first time buyers. The Redrow chairman has stated that currently, first time buyers are having to find deposits of 20% and more. This, as well as being way above the long term average 6% is also a bridge too far for most first time buyers.

"We are not blaming the banks," he said. "This comes down to Basel III and the restrictions on their balance sheet."

He urged the Government to set up an insurance indemnity scheme for first-time buyers to ease the problem, or provide tax breaks.

It is unlikely that the government will take any notice. We don't need Redrow to tell us that first time buyers are struggling, but the stimulus of the housing market is over and we know that this government is keener to cut spending than increase it.

Banks are likely the best chance first time buyers have of being able to buy in the UK again. It is ironic that during a correction that should have made it easier for first time buyers to get on the property ladder, the banking system was hit so hard that it has actually gotten harder. Unfortunately you can't see any change from the banks until a few years down the line, when confidence has increased greatly, as well as profits from international investments.

Until then first time buyers will just have to rent and save.

UK House Prices Proving Unpredictable, but Maybe...

2010-09-09T09:20:55+00:00

Well, it is starting to look like the bulls have been right again. Halifax has just revealed a 0.2% price rise in August, following the rise of 0.7% in July. Or is it; according to Nationwide prices fell 0.9% in August after falling 0.5% in July.

The fact that those two -- very similar in terms of how they measure prices -- indices are falling more out of sync now than they have been since the crash started is only adding to the uncertainty that people feel for the UK housing market.

Halifax economists believe that low interest rates will sustain the market throughout the austerity and impending job cuts. They believe the market will be near enough flat this year. Because the combined rise in the last 2 months more than cancels out the falls in May and June, and that is how it has gone so far in this year. This makes it look like Halifax could well be right.

Meanwhile, after falling between February and March, the Land Registry index showed a strong growth of 0.4% for July after being almost flat in June. The Land Registry is also reporting transactions falling, which contradicts the price rises.

On top of that mortgage approvals fell again in June, from 34,574 mortgages approved for house purchase in June, to 33,698 in July. Not a massive fall, but part of a slide that has lasted several months from a high of almost 50,000 mortgages being approved per month. The worst thing is that even at nearly 50,000 mortgage approvals per month it was still short of the 20,000 properties being added to Rightmove every week.

But low and behold, prices are continuing to rise aren't they? Well, yes they are, except of course according to Nationwide.

Nationwide matched up with the Land Registry in falling 1% in February, but then bounced around 1 % growth for March and April, which is when its decline began. In May prices grew only 0.4%, and flat lined in June, before the 0.5% and 0.9% falls mentioned for July and August.

The truth is that the housing market has now proven itself unpredictable. For many months now there has been plenty of things to put plenty of pressure and push prices down, but some mystical force seems to combine with low interest rates to pull it through. All that time though, mortgages were rising, with mortgage approvals now falling, perhaps that run is coming to an end.

Turkish Tourism to Hit 30 Million Visitors by 2011

2010-09-08T15:42:34+00:00

If Turkey doesn't hit 30 million visitors this year, then it will stagger it, leaving it in good stead to hit the milestone in 2011, according to Turkey based real estate agent New Home in Turkey. The firm believes that the unique factors driving growth this year could push it towards 30 million, and the natural growth from word of mouth and the continuance of these factors will push it higher in 2011.

"We have just witnessed a unique couple of years for Turkish tourism. In 2009 we had growth from Britain and other places fuelled by the strong euro. This continued into this year, and since the euro strengthened we have seen Turkey's competitors in sovereign debt crises, and a surge in people taking last minute deals to Turkey and other low cost destinations," said director of the firm Aydin Cakir.

We have all watched Turkey's rise in the last couple of years. Whether or not it is the natural progression from Turkey's rising status as a holiday home destination from 2006 or not is unknown, but what is known is that its competition being hampered by bad press, has certainly helped its shine to be seen by a wider audience.

To explain, we have Greece and Italy hampered by the sovereign debt crisis this year, and Spain hampered first from its having among the worst crash of all the world, and then from its being caught up in the sovereign debt crisis as well.

This growth has been helped by the late-minute-deal-rush as mentioned by Mr Cakir. Basically, things like the ash-cloud and the hung parliament stopped people from booking holidays, leaving travel agents with massive amounts of late-deal stock to shift in its aftermath. The agents reported Turkey was a leading benefactor of this boom.

Then of course, you have the fact that Turkey was voted the top destination in the world by readers of Conde Nast Traveller magazine. This is a testament to how far Turkish tourism has come and could also propel future growth, according to Cakir:

"Turkey is a great place to visit, and for everything that brings or signals growth, more growth is born from the subsequent word of mouth. What we also see is that a high proportion of today's holidaymakers become the holiday home buyers of the future, so of course it is good for the property market as well," he said.

"Antalya property is particularly prominent in this trend; we see it having a higher percentage of buyers to tourists going forward,"e; he said.

Turkish Tourism Wins Highly Acclaimed Award

2010-09-03T14:01:36+00:00

Readers of the prestigious Conde Nast magazine have voted Turkey their favourite destination. The readers, which scored destinations on 10 criteria, scored Turkey highest for range of accommodation and value. The readers scores are collated and turned into a satisfaction percentage. For Turkey to win the award for the first time with a score of over 94% is truly a testament to how far Turkey has come. Needless to say this has made many people very happy.

"We are thrilled that Turkey has won this prestigious award, which is even more meaningful given that it is chosen by the readers themselves," said Irfan Onal, Director of the Turkish Culture and Tourism Office UK.

"This is the highlight in what has been a very successful year as the Turkish Culture and Tourism Office UK. Indeed, visitor numbers from the UK continue their spectacular rise, with year-on-year figures up 15.5% for the first 7 months of this year," he explained.

"Year on year enquiries for homes in Turkey have increased. We are seeing leisure purchasers set their eyes on some of the fabulous coastal resorts on the Mediterranean Sea and Aegean Sea and we are also finding investors flooding into the market with a particular interest in Istanbul," said Julian Walker, director of Spot Blue.

Walker went onto explain why the rising tourism acclaim Turkey is gathering is also boosting foreign property investment in the country, he said:

"Turkey offers excellent value for money for both holiday makers and home owners. The cost of living is so low and in real estate you can get a lot for your money compared to other European destinations. Value for money was one of the voting criteria as well as climate, culture, variety of attractions, people / hospitality amongst others. We can certainly see why Turkey has won the prestigious Cond&eaccent; Nast Traveller award, it simply ticks all the boxes."

UK Housing Market: No One Wants to be a First Time Buyer

2010-08-30T19:09:47+00:00

No one wants to be a first time buyer in the UK right now. Apart from those wealthy enough to have 32,000 or more lying around in cash, practically everyone else has given up on getting onto the property ladder and set about trying to make lives for themselves in private rented accommodation.

During the boom, first time buyers could buy on a 100% mortgage. But as prices rose the disposable income that first time buyers were left with was less and less, one unplanned night out and it was mortgage arrears city. At this point less and less could afford to buy at all, the financial crisis was simply a catalyst for a house price crash that was becoming inevitable.

Normally during a correction house prices fall until first time buyers can comfortably afford to buy again. The correction in the 80s lasted six years. This gave first time buyers plenty of time to save, and they could buy comfortably when prices came down into their bracket.

This correction was different: because the recession was a bigger and bolder hit, the government feared that a wave of repossessions like that seen in the 80s would send the UK economy into a death spiral. During the 80s crash homeowners did the same as in this one, battened down the hatches. But the waves of repossessions kept supply up and prices heading down. Thus, by staving off the repossessions the government's efforts cause supply to constrict and prices to stabilise far more quickly.

This was good news for the economy and great news for struggling homeowners, but terrible news for first time buyers.

Not only did prices stabilise and start rising again long before they had become affordable to average first time buyers. But they could no longer throw their lives into a 100% mortgage because now the banks want 10% deposits, and 20% is necessary in most cases, either to get a mortgage or to be able to afford the repayments on the mortgage.

Before if you were earning enough to make mortgage repayments on a 100% mortgage (disposable income aside) the chances are you could buy a house. Now you need to be earning enough to buy a house -- at around the same price in many areas -- and to be able to lay your hands on 10 - 20% of the purchase price, between 16 and 32000 on the UK house price average.

With wages mostly either frozen or falling and austerity biting it is easy to see why no one wants to be a first time buyer in the UK right now.

Turkey Standing out as Brightest Emerging Market in Europe

2010-08-27T15:49:58+00:00

I just read a great article on the blog of Turkish property agent Spot Blue, with an excellent explanation of why Turkey is gaining recognition as one of Europe's top emerging markets. The post was refreshing because of its punchy, no-messing style and the way it incorporated facts and figures with observation, but mostly because it was right on the money.

Turkey is one of the top emerging markets in Europe today; having surpassed the point where EU accession was necessary to make it investment-worthy not long after it surpassed the need for EU assistance in the middle of last year. It did this with a wide range of agreements and increasing bilateral ties with countries from around the world, including Brazil, Russia, India, China, the US, the UK, Canada, and many middle eastern countries including Syria and Jordan.

The banking system was reformed during the Turkish financial crisis of 2001. Because of this, today the Turkish banking system is one of the most robust in the world, not least because the likes of the EU, UK and US banking systems are still in a state of denial and disarray. During the 2001 crisis reforms were also made to Turkish currency reserves, and the results of that can be seen in the stability of the Lira.

With the EU sovereign debt crisis still far from over, and many European banks still trying to hide from their bad loan problems, and the Turkish picture of stability and serenity, and double digit economic growth, of course investors will be giving it more than a passing glance. Spot Blue said it best:

"With all this in Turkey's column, against an EU near-crumbling at the hands of a sovereign debt crisis no one would have dared suggest we'd see, it is easy to understand why Turkey is standing out to investors as the best place to invest."

Spot Blue is currently marketing property in Turkey priced from as little as £25,000.

The Overseas Property Investment Crash: Where it all Went Wrong

2010-08-26T21:43:39+00:00

In the early noughties, the makings of an overseas property boom were being born. At the time, buyers were primarily wealthy buyers, buying property in the core markets like Spain; markets already well known by tourists and well covered by flights. They were primarily purchasing holiday homes.

The advent of budget air travel changed all this. Budget airlines opened up new destinations, and made air travel practical for the masses. People quickly realised that property was cheap in these new destinations, and when looked at in tandem with the rapid growth in tourism and services (massively fuelled by growth in aviation) in these emerging markets, the investment potential of properties in these destinations quickly became apparent - the overseas property investment boom was born.

And what a boom it was. Speculative investors were buying off plan property in emerging markets like they would buy last minute tickets at a travel agent; fast and furious.

Emerging market property is a high risk investment, and anyone that tells you any different is lying. The trouble is that simply failing to mention risk is not a lie, and the onus is not on agents to talk about risk, it is up to buyers and investors, or their independent advisers to assess the risk of an investment.

A good rule of thumb is that if it is offering high (5% plus) returns it is probably high, or at least moderate risk. During the last boom, confidence in overseas property investment got so high that people were investing in emerging markets with as much thought and care as opening a bank account, and that is why so many people lost so much money in the crash.

Don't get me wrong; of course no one could have predicted the magnitude of the crash, but take Dubai for an example. I have chosen Dubai a: because of the massive number of people who lost money in property investments in the country and b: because that loss was among the easiest to predict.

In late 2007 EFG Hermes brought out a report on the alarming oversupply that was being created in Dubai. Developers were building towering feats of engineering magnificence -- including the world's largest tower, and islands in the shape of the world -- bringing hundreds of new units into play, when there last developments were nowhere near sold out. Damn, when they ran out of land they just created more.

Dubai was heading for a fall, the global crisis was only the catalyst for what was becoming inevitable anyway, and anyone who did even a basic amount of research could easily see it. Yet thousands of investors were still pouring money into off plan properties; almost all of them would become buy to flippers with no property to flip.

Dubai was perhaps the most dramatic case, because people were left with nothing in most cases. But many of the people who have suffered from returns much smaller than they went in expecting, could also have avoided disappointment by doing a little more research.

I am an avid believer that, done properly, there is no more rewarding property investment. I wrote a guide on how to do it properly, so if you want to find out how you can read it here.

UK House Prices: Can We Really Avoid a Second Dip?

2010-08-25T21:49:29+00:00

According to Nationwide, UK house prices fell 0.5% in July, slowing the annual growth rate to 6.6% from 8.7%. Worse than that now mortgage approvals are falling as well. I had started to doubt my firm believe in the inevitability of a second dip; maybe low interest rates would continue to support the market? Now though, with mortgage approvals showing that demand may not be so underpinned I am getting back out my wooden spoon and giving it a stir up.

Throughout the duration of rocky periods experienced since prices began their near constant rise last March; every time it looked like the beginnings of a second dip, bulls could always point to still-rising mortgage approvals as a positive indicator. Not anymore.

My readers know I have been an avid believer that the weak fundamentals supporting the growth, combined with the fact that the correction had not corrected the severe over-valuation of UK houses, made a second correction inevitable, but even now, when there is mounting evidence to suggest we are in it, many analysts still believe that the market can survive.

Take the last Halifax index for July; the Halifax housing analyst Martin Ellis said that while increased supply from things like the abolition of HIPs had relieved the upward pressure on prices, that low interest rates, and the economic recovery, by underpinning demand, would support the market sufficiently to keep the line flat rather than down.

That said: Halifax found a 0.8% increase in prices, compared to Nationwide's 0.5% decline and also highlighted a 2% rise in mortgage approvals. With mortgage approvals now falling according to the British Bankers Association, demand could prove to be less underpinned than Mr Ellis thought. Further, the economic recovery, another factor mentioned by Ellis is looking less peachy than it did a few months ago.

We are struggling to bring inflation down, and struggling to get growth up. With the austerity incoming, can we really expect growth to accelerate? If all that weren't bad enough we have millions of job losses to come in the public sector, which will undoubtedly affect jobs in the private sector, as the newly unemployed or job-fearful cancel building work and leave the car service for a bit longer.

All in all there is more reason to believe we are in for a house price dip than there has been since 2008, and, as we all know, that is saying something.

But of course, we have been here many times before; with me and countless others continuing to provide countless reasons why a second dip was just around the corner, and all the while that dip never coming. Time will tell if this time is indeed any different.

Turkish C.Bank Keeps Interest Rate at Current Low

2010-08-20T14:46:58+00:00

The Turkish Central Bank has decided to leave rates at the current low of 6.50 percent for overnight borrowing, and 9% for lending.

The bank's Monetary Policy Board issued a statement saying that gradual increase in domestic demand had been tempered by falling foreign demand, and that: "It is estimated that it would take some time for capacity utilization in the manufacturing sector to return back to pre-crisis levels," it said.

The board also said that, while unemployment fell recently, that joblessness is still too high, and also mentioned the shakiness in the wider global recovery.

The Central Bank doesn't expect what it called soaring inflation to come back down until the fourth quarter of this year.

This is good news for overseas property buyers according to UK based Turkish property agent Spot Blue. The firm wrote on its blog:

This is positive news for anyone considering buying a property in Turkey. Because Turkey made banking reforms in the 2001 crisis, liquidity has remained in the Turkish banking systems, and availability of mortgages largely unaffected by the crisis. Thus, foreigners who are able to obtain Turkish mortgages can currently do so very cheaply.

"But it is worth remembering that Turkish banks are reluctant to lend on properties that can not be seen and valued, thus borrowing tends to be on completed properties only," said Julian Walker, director of Spot Blue.

Spot Blue is currently marketing property in Turkey priced from £25,000.

Property in Spain August 2010: Is it Time to Buy Yet?

2010-08-15T08:54:24+00:00

When the Spanish property market had been taking a severe beating for about 6months my brother in law (of an estranged sister whom I was meeting for the first time, and proud owner of a French leaseback in Rhone Alps) said to me: I know things are bad in Spain now, but do you not think at the low prices of some of the properties that it is worth a punt for long term gains? Something like that anyway, well it was a good while ago.

Anyway, what I said was: I have never liked Spain; it's predominantly overcrowded, overdeveloped and worse; overvalued. Even if you were getting a property in a popular area for 30% what it was priced at in 2007, there is a high probability that it is still 20-30% overvalued, not to mention the fact that the strength of the Euro is adding. But if you can pay cash then there are some cracking repossessed properties out there.

If he asked me the same question today I would say pretty much the same thing. The banks have hidden bad loans and manipulated the figures, the official house price index continues to report prices down a fraction of what other indices and agents are reporting, and all the discounts you hear about are on new build properties and may not even be a discount at all.

There are some cracking deals on repossessed properties being marketed in the UK, but you really need to go and stay in Spain for a while if you intend to buy a repossessed property. I say this because they sell really quickly, and it is a good idea to view any property before you buy it, thus to see it before its gone you need to be near it.

To answer the question of is now time to buy? Yes, there is availability of repossessed properties set to continue, and Sterling has had a run against the Euro and taken a further 15% of properties in the EU. But do your research; avoid over developed areas and only when you have found a sound location where supply levels are around about the same as demand (yes, there are some places that had previously gone unnoticed), then camp out and start making offers on distressed and repossessed property.

Bad Year Leads to High Availability of Cheap Holiday Deals

2010-08-11T16:24:16+00:00

The British travel industry has highlighted a rash of cheap late deals on offer this year, because of the massive number of events that all affected demand for holidays.

The volcanic ash cloud, the tied UK election, the coalition, its emergency budget, austerity measures, impending public sector job cuts and BA strikes have all hampered demand in the travel industry, and delayed people making travel plans.

For a year in which the travel industry had expected a return to growth and increased availability accordingly, this rash of bad luck has led to massive availability in the late bookings segment.

Because of this people are getting discounts of up to 40% on holidays, with availability especially high on trips to Spain, Greece and other destinations on the Med. Discounts will go as high as 60% for those booking after the summer holidays.

Clare Banham, from the travel association Abta, said: "We have seen that a lot of people have delayed booking their holidays this year. The vast majority are still travelling, but booking closer to departure. People are getting fantastic value for money."

The Co-Operative Travel said the biggest savings were in the eastern Mediterranean - Paphos, Crete, Zante and Turkey in particular. "We reckon the typical family holiday to these places has fallen by 13.5% on last year - that's a £232 saving for the average family," said a spokesman.

"Certainly the booking patterns have changed. This has been an unprecedented year for the travel industry."

Turkey is a strange one, because recent data showed that tourism to Turkey is growing strongly. According to Turkish property agent Spot Blue this is because of growth in other markets. The firm said on their blog:

"Although it isn't odd, because figures have revealed markets like Russia and those in the Middle East making up for any lull in British travellers."

Spot Blue is currently marketing property in Turkey from £25,000.

Turkish Air Travel Growth Continues Apace

2010-08-05T16:04:20+00:00

Data has revealed a 24% increase in passenger numbers in Turkish airports between January and June this year. A big increase on the 7.3% growth recorded for 2009 compared to 2008, which was good in its own right because -- as we know -- 2009 was a difficult year for international aviation.

The biggest growth was in Istanbul Sabiha Gokcen airport, which saw visitor numbers up an incredible 93% in the first half of this year compared to last.

According to UK based Turkish property agent this continued growth is proof of the boost given to Turkey by the Euro's strength spiralling upward against the pound in 2009. Director of the firm Julian Walker said on the company blog:

"Last year was a good year for Turkish tourism; the pound went down to being worth only 1.10 euros, and then to near parity as the year progressed. This sent British tourists and property buyers outside the Eurozone in their search for low cost holidays, and better value for money.

"It seems that we are still seeing the effects of this into this year, despite the pound strengthening against the Euro. Turkey is a great place, with great holiday destinations, and great properties and everything far cheaper than in the UK, so the people who may have been slightly pushed toward it last year, will be returning for years to come through choice."

Spot Blue is currently marketing property in Turkey for sale from as little as £25,000.